Politics

[galacticmonkey 5,000+ posts]

Idiot or not saying he was the cause of the banking/housing crash is a ridiculous statement.

It started with the Community Reinvestment Act in 1977 passed by Jimmy Carter. It was a shitty bill in the first place, then Chris Dodd, Barney Frank, and Bill Clinton fuxored it up even more. All that paired with Clinton dropping the fed loan rates so much pretty created a bubble. Why do you think the economy was so good when Clinton was in? Everyone was getting homes. Then the bubble popped, leaving us where we are now.

This is what happens when you take a free market and give everyone an equal slice of things. If its just left as a totally free market, it will work. If they make it a socialist country it will work (look at alot of European countries). But when you leave it as a free market and bail out companies who arent fit for business and give the people on the bottom stuff they cant afford/have, problems start. A free market cant survive when the government picks the winners and losers.

 

[loopkiller 10+ year member]

So what I want to know is this:

If the economy turns around for the better (which it certainly will) during this administration, will all of you Obama haters give him credit for doing so? Can you see yourself giving the man props for righting the ship? Or will you come here hating on him for any other reason you feel is convenient? I cannot imagine that you will change your tune no matter the progress of this administration. S you might as well just say you are a hater and we can all move on.

If you want my 2 cents, I think in the grand scheme of things, the office of the President does have some minor influence on the world economy, but Congress is much more liable for regulating our financial markets, or lack there of.

 

[wu36ca 10+ year member]

It started with the Community Reinvestment Act in 1977 passed by Jimmy Carter. It was a shitty bill in the first place, then Chris Dodd, Barney Frank, and Bill Clinton fuxored it up even more. All that paired with Clinton dropping the fed loan rates so much pretty created a bubble. Why do you think the economy was so good when Clinton was in? Everyone was getting homes. Then the bubble popped, leaving us where we are now.
This is what happens when you take a free market and give everyone an equal slice of things. If its just left as a totally free market, it will work. If they make it a socialist country it will work (look at alot of European countries). But when you leave it as a free market and bail out companies who arent fit for business and give the people on the bottom stuff they cant afford/have, problems start. A free market cant survive when the government picks the winners and losers.

This is wrong for oh so many reasons...

A)One is how can a 30 year old law be blamed on a phenomenom that is less than 10 years old? And two most of the people that were involved in sub primes were well to do people who bit off more than they can chew. It was not only the poor and minorities. Home prices went up for two reasons. Housing prices went up initially in the last ten years because of the internet boom. The economy was seeing prosperity the likes it had not seen in a very long time. People took this prosperity and tried to live the American dream so they bought houses. Prices went up initially for this reason. The increase in prices was compounded by speculators seeing an opportunity in real estate. So they bought in creating even more demand thus raising home prices even higher.

B) The president has no control over interest rates. Hell the Fed does not even have control over interest rates. Banks charge their own rates. A bank can charge whatever it feels like. And usually what happens is if a bank sees a high risk client is they provide a higher interest rate to hedge the risk. Bank were not charging these rates because they saw fast money in making these loans. People were not worried about the long term as is usually the case. They saw quick deals coming faster than they could process them and they ran with it. If banks were smart they just would have charged higher rates to high risk clients. Banks provided teaser rates to grease the skids. That was their bad. Any federally proposed rates (by the Fed, not the president) could not create a bubble because the banks choose what they charge.

C)Banks were making a killing selling these loans to Wall Street. Investors were eating them up. This made what seemed like a cushion to the banks. They lose out on the foreclosure, well at least they made money on the sell to Wall Street. This was definitely not Clinton's fault. He has no control over how Wall Street invests. Hell the closest institutions that the government controls (Fannie Mae and Freddie Mac) in this respect are heavily regulated about how much they can invest in the types of mortgage backed securities. The problem happened when Wall Street realized it got sold bunk loans and started getting out of that game. Now the risk was soley on the banks.

D) There were way too many stakeholders in this. Speculators, Wall Street, banks, home buyers, realtors, and all the other smaller groups involved. They have infinite amounts more power than the president has when controlling the market. Their dumbass moves trump anything the president can do.