So, our economy is in recovery now, did ya hear? Good news for Wall Street, bad news for everybody else but when it comes to our politicians let’s be honest, beyond Wall Street is there really an America?
Ask homeowners facing foreclosure.
Ask the people who are unemployed, who still aren’t getting hired.
Ask the people trying to get loans, who’ve been turned down by the banks who received all the TARP funds, designed in part to increase their lending but in fact, did nothing of the sort.
Hell, just ask anyone who isn’t politically or financially connected to that fiscal top 1% of our country and they might give you another story, just don’t ask the Republicans who are to blame for this whole mess, because they keep trying to tell anyone who’ll listen that the trouble with our economy is the pensions, wages and benefits of state unions, not the banks and investment firms like Morgan Stanley and Goldman Sachs, those same cesspools from which the past three administrations have extracted their financial cabinet types.
So, wanna know how we got into this mess, who should have done something and didn’t or who did something when they shouldn’t have? All the people who are responsible for the trashing of your finances, your predatory home loans, who glad handled policies that made money for their financially elite friends, whose banks then still failed, only to turn around and then design a TARP bailout that gave your money to all their friends and past co-workers, again?
From Washington’s Blog…(website with outstanding economic analysis and commentary) here is a summary of the Financial Crisis Inquiry Commission’s report on the, you guessed it…causes of the financial crisis:
The many causal factors highlighted in the FCIC report via Barry Ritholz:
• Alan Greenspan’s malfeasance — his refusal to perform his regulatory duties because he did not believe in them — allowed the credit bubble to expand, driving housing prices to dangerously unsustainable levels; Greenspan’s advocacy for financial deregulation was a “pivotal failure to stem the flow of toxic mortgages” and “the prime example” of government negligence;
• Ben S. Bernanke failed to foresee the crisis;
• The Bush administration’s “inconsistent response” — saving Bear, but allowing Lehman to crater — “added to the uncertainty and panic in the financial markets.”
• Bush Treasury secretary Henry M. Paulson Jr. wrongly predicted in 2007 that subprime meltdown would be contained.
• The Clinton White House, including then Treasury Secretary Lawrence Summers, made a crucial error in “shielding over-the-counter derivatives from regulation [CFMA]. This was “a key turning point in the march toward the financial crisis.”
• Then NY Fed President, now Treasury secretary Timothy F. Geithner failed to “clamp down on excesses by Citigroup in the lead-up to the crisis;” Further, a month before Lehman’s collapse, Geithner was still in the dark about Lehman’s derivative exposure;
• Low interest rates brought about by the Fed after the 2001 recession “created increased risks” but were not chiefly to blame, according to the FCIC (I place some more weight on Ultra-low rates than they do);
• The financial sector spent $2.7 billion on lobbying from 1999 to 2008, while individuals and committees affiliated with the industry made more than $1 billion in campaign contributions. The impact of which an incestuous relationship between bankers and regulators, Congress and bankers, and classic regulatory capture by the industry.
• The credit-rating agencies “cogs in the wheel of financial destruction.”
• The Securities and Exchange Commission allowed the 5 biggest banks to ramp up their leverage, hold insufficient capital, and engage in risky practices.
• Leverage at the nation’s five largest investment banks was wildly excessive: They kept only $1 in capital to cover losses for about every $40 in assets;
• The Office of the Comptroller of the Currency along with the Office of Thrift Supervision, “federally pre-empted” (blocked) state regulators from reining in lending abuses;
• The report documents “questionable practices by mortgage lenders and careless betting by banks;”
• The report portrays the “bumbling incompetence among corporate chieftains” as to the risk and operations of their own firms:
–Citigroup executives admitting that they paid little attention to the risks associated with mortgage securities.
–AIG executives were blind to its $79 billion exposure to credit default swaps;
–Merrill Lynch top managers were surprised when mortgage investments suddenly resulted in billions of dollars in losses.
Have an inexpensive day.