They warned us, but US eased loan rules
I am big on accountability. If you screw up, everyone should know about it and you should be held accountable for your actions. This is the way that most normal jobs work. I don't care if it doesn't help things or is unhealthy. I can't help it. The current administration, with a large helping hand from the "Maestro" HA Alan Greenspan played a huge part in getting the United States into the economic mess that we are currently in. If anyone else outside of a Big 3 CEO had screwed up at their job so badly, they would have been canned ages ago.
This is not a political commentary, but a criticism of people who have been absolutely terrible at their jobs. I am a registered Republican who is anxiously counting the days until the current administration gets the heck out of office. Come on January 20th, don't let the door hit your arse on the way out Mr. Bush and take that fool Paulson with you.
Here's the latest on the current administration's ineptitude. The Associated Press published this fantastic article yesterday: They warned us, but US eased loan rules. Apparently, the Bush administration ignored numerous warnings and caved into pressure from major banks, many of which have since failed and decided not to implement proposed crackdowns on no-money-down, interest-only mortgages that it was considering implementing years ago.
Aggressive lobbying from banks, including statements like this gem from the home loan president of the now defunct WaMu "These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages," persuaded regulators to delay and significantly soften new, tougher mortgage rules.
I believe in having fairly free markets, but not the Wild West. The system needs to have at least a little oversight and regulation. The Bush administration's and Greenspan's Laissez-faire attitude, which allowed investment banks to lever up a million to one, allowed the use of all sorts of derivatives, and let this mortgage mess spin out of control are absolutely disgusting.
Ironically, this hands-off attitude has brought us the largest government intervention in the markets since the Great Depression. If we had been able to reach some sort of middle ground, we wouldn't be in this mess right now.
What we need right now is a change. This is not a political statement, it's a fact. What we were doing was not working. I just hope that the new administration doesn't take things too far in the other direction. The only things that Obama could possibly to make things any worse would be to empower unions too much, raise taxes too much, or implement protectionist tariffs. I suspect that we have learned enough lessons from the failed policies that exacerbated the Great Depression to avoid these things. Time will tell.