I visited the Wikipedia pages and this video should be watched with a grain of salt.There's an interesting discussion page linked to the Wikipedia page which questions the neutrality of the article and whether or not a single piece of legislation caused the financial crisis.Lending companies weren't forced to provide sub-prime loans... but Obama was and is clearly the cause of financial bailout (Sarcasm).
Yeah I read the wiki discussion before posting this as well as a bunch of follow up blog posts from some of the sited economists in the articles on both sides. Make no mistake about it this is not a neutral post. What fun is neutral? I also read through some of the legislation. This is one theory and there are some truths to it. That does not make it the only sequence of events that could have led us to where we are right now. Some of the legislation I read that was cited in support of this theory could have very well encouraged the kind of business practice that caused some of the problems we are facing today.It is less of a stretch for me to believe something like this then a catchy punch line like corporate greed.
I posted this mainly because of quotes such as:Pelosi said the provisions added by Democrats will protect taxpayers from having to pay for the bailout."We sent a message to Wall Street - the party is over," she said at a press conference with Reid and other Democratic leaders from the House and Senate.I am tired of hearing how this is the fault of financial institutions alone without addressing the other causes of problem.I see it to be a 3 tiered issue. Poorly instituted government control and regulation, poor risk analysis at the corporate level, and ignorant people borrowing more money then they have any business borrowing. Not many writers or politicians want to stand up and say you know what to a degree we helped to cause this problem. Not many individuals want to stand up and say you know what I should have saved for 5 more years before I bought that house or I should have bought a smaller home. There is 1 group being held accountable and in my opinion that is a fairly small part of the issue. It is kind of like blaming the crack dealer when cocaine is legalized for killing people. Don’t blame the government or the crack head only blame the person capitalizing on a market. The video posted highlights of 1 way that government IS partially responsible. Do you disagree that the government is not in part responsible for this mess?
If the CRA is described as the following "An act of Congress enacted in 1977 with the intention of encouraging depository institutions to help meet the credit needs of surrounding communities (particularly low and moderate income neighborhoods). The CRA requires federal regulators to assess the record of each bank or thrift in helping to fulfill its obligations to the community. This record will then be used in evaluating applications for future approval of bank mergers, charters, acquisitions, branch openings and deposit facilities." http://www.ffiec.gov/cra/history.htmIt is clear in its own description that it is designed to coheres banks into taking on riskier lending practices as their score kept with the CRA will be used in part to determine if the bank will be awarded the following : future approval of bank mergers, charters, acquisitions, branch openings and deposit facilitiesThis looks strongly to me like banks are being encouraged by the federal government to take on risky debt. Like I said in my last post it is not all the governments fault but lets fairly distribute blame.