Articles Comments

Debt Relief – Insolvency – Bankruptcy Information » Insolvency » Do conservatives really think this recession was caused by regulation?

Do conservatives really think this recession was caused by regulation?

Deregulation allowed the merger of banks that created banks that would be systemic risks if they failed
Deregulation allowed massive increases in financial liabilities of banks, through relaxed leverage limits, and led to insolvency after capital reserves decreased by just a few percent
Deregulation allowed the bribery of the ratings agencies
Deregulation allowed the fraudulent trading of derivatives
Deregulation allowed the securitization of mortgages, which encourages predatory lending

Deregulation allowed several insurance policies to be taken out on the same derivative, which brought AIG to its knees.

How on earth could anyone think that regulation caused this crisis?
Being forced? Are you really talking about the community reinvestment act? What a joke.

The securitzation of mortgages relieves local and investment banks from the responsibility if loans they make dont get paid. It placed all the responsibility on the investor and on AIG, and eventually became a system than encouraged the signing of sub prime loans, just to increase the volume of collateralized debt obligations being packaged and sold. It encourages predatory lending. Relaxed limits on leveraged allows banks to loan out as much as 30 times as much as they actually owned, as opposed to the normal 7 times before the conservatives had their way. If banks werent allowed to loan out that much money, as they hadnt been for years, a small decrease in their capital wouldnt have equated to a huge drop in their reserves to liabilities ratio, and they would have remained solvent and never even needed a bailout.
“What both sides fail to understand is that none of this would have happened if Congress didn’t change the laws set in place during the Great Depression.”

Republicans repealed those laws!!! Republicans repealed glass steagle, made derivatives illegal to regulate, and relaxed leverage limits!!! democrats understand it perfectly well.

RELATED POSTS:

  1. Why have liberals forgotten that it was liberal affordable housing policies that caused the mortgage meltdown? The banks didn’t lend money to people who couldn’t pay it back until laws enacted by liberals like Barney Frank,...

  2. What caused insolvent banks, what does all this mean? Im doing a report on many economic problems, and im kind of leading to the point how, people failed to...

  3. Would reinstating the Glass-Steagall act fix a lot of our banking problems? The Glass-Steagall Act basically separated commercial banks from investment banks and made them separate entities. It kept the banks from...

  4. If B. Clinton and a Republican Congress hadn’t deregulated the banks, would the economy still be in shambles? In 1999, Bill Clinton signed into law the Gramm-Leachy-Bliley Act, which in essence allowed for investment banks, commercial banks, and...

  5. Why did dems block Fannie/Freddie regulation, despite repeated attempts to REGULATE THEM? Fwank – F/F “Fundamentally sound”, blocked legislation Greenspan – larger F/F risks our financial security, increased insolvency Schumer – F/F...

Written by

Filed under: Insolvency · Tags: , , , , , ,

18 Responses to "Do conservatives really think this recession was caused by regulation?"

  1. shea c says:
    its all Obama fault
  2. Matthew D says:
    Whether they believe it or not; they insist others should.
  3. Yak Rider says:
    Of course not, it was caused by lenders being forced to loan trillions to borrowers who were not qualified to borrow any money.
  4. jeweljvh says:
    Absolutely Regulation was the big causal factor in this mess. That wasn’t all though.

    You know what? Right now banks are going through the same thing in many cities. One in St Lewis is being jacked by the Justice Department to force them to relax standards for loans to minorities. That’s where the big stuff broke in the last situation. Bad mortgage collateral packages.

    The last housing bubble was created by Democrats Community Reinvestment act and Fannie and Freddy that were used to push more lax lending that had high level democrat operatives made CEOs. Gorelick, Reins, Daily, all huge operatives for the Democrats who’ve been in on many operations damaging to the country.

    REGULATIONS ARE EXACTLY WHAT CAUSED THIS! forcing banks to make bad loans and deliberate regulation that killed energy production and pushed up prices and a bunch of Obama’s super wealthy Carbon Exchange buddies who invested in the scheme OBAMA FUNDED THROUGH GEORGE SOROS JOYCE FOUNDATION! before we ever knew about him …. they push speculation that kicked off the economic freeze that exploded the banking bomb the Democrats have been setting up since Carter … and GEORGE SOROS is behind it. That kind of thing is EXACTLY what he does.

    You falsely assume, because of a huge dishonest propaganda campaign, is that Republicans are the rich and support the rich, it’s not true. Democrats supporters are the most wealthy, and they get loop holes and money from the Democrats in return for bribes aka contributions and activist efforts they fund.

    Who’s behind all this? The organization that created the Progressive movement in the USA close to 100 years ago. Their symbol is Wolves in Sheep’s Clothing, and that’s exactly how they work. That’s why you think Republicans are the rich and discount world bankers, the same scum bags who run the Federal Reserve Bank, or in the same groups. It’s the Fabian Society, and George Soros is a Fabian Society member.

    Read especially the way the Federal Reserve came to be in the top link, it’s instructive to how they work and you can see the tracks like a distinctive foot print, this is their MO, it’s how they work, it’s diabolical and super effective. They are a great danger to our country, and the world in fact.

  5. Good. Bad. I'm the guy with the gun. says:
    To a point, yes.

    But, then, I don’t care what a bank waved in front of me or what my house was worth. I never refinanced any extra debt into my loan. When I bought my home 15 years ago, I put 20% down, regardless of the bank saying I could get away with putting down less.

    Playing fast and loose with what one owes lies * squarely * on the shoulders of the mortgage holder.

  6. Angela Q says:
    And overregulation caused the BP oil spill, too. BP would have done the right thing if there were no regulations for them to ignore. ∠°)
  7. that one guy says:
    IT IS ALL FANNIE AND FREDDIE’S FAULT get it in your thick skull
  8. 2 far Reicht says:
    They draw false conclusions that rules and regulations are Big Gov’ts way of controlling/interfering with free markets.

    Yet the free market is exactly why gas prices are high, while the price of oil still drops. But “that’s Obama’s fault”…even though Obama has NOTHING to do with the demand that China and India have for the world markets of oil.

    I guess they think our Gov’t should control China and India, but leave our big oil companies do whatever they want…and subsidize them to do it.

    your question and points clearly shows they have no idea what they are talking about.
    They just hate in general.

    @ the “Freddie and Fannie haters”…..Freddie and Fannie simply allowed subprime borrowers to get the house without a large down payment or perfect credit…it NEVER said to lend to people who do not have the means to make the payments. HUGE difference, so you need to get THAT through your thick skulls.

  9. Brainwashed 0bama-bot says:
    And libs actually think we can get out of it by spending MORE?

    Keyensian economics = FAIL.

    National Debt, $14 Trillion and counting…and 0bama is responsible for nearly half of that himself…in just 2 1/2 short years.

  10. Hermione2 says:
    Look at the history. When America was at its best, there was little government regulation. Government regulation began to increase and now America is in a recession. Interesting, isn’t it?
  11. RJC says:
    No it was caused by the Community Investment Act which required banks to loan to less than credible home buyers.
  12. andy says:
    Actually, most Conservatives understand that it was regulation in the negative way or as you say it deregulation that the Democrats started way back in the 1970′s and most of the items that you bring up were signed into law during the Clinton administration. That is what I have heard from most Conservatives. It is the liberals who want to blame Bush for everything even though he warned about the mortgage problem back as early as either 2001 or 2003.

    People like me saw this coming as our savings rate dropped and credit card debt increased.

    What both sides fail to understand is that none of this would have happened if Congress didn’t change the laws set in place during the Great Depression.

  13. Troy Aiman says:
    What do you expect? Theres not a college degree in the whole group
  14. greenman says:
    everyone tends to forget that the economic crisis started BEFORE THE ELECTIONS WHEN BUSH WAS IN OFFICE. it was a big issue in the debates.

    but no, it’s obama’s fault.

    car accident? it’s obama’s fault. miss your flight? it’s obama’s fault. get herpes? it’s obama’s fault.

  15. Constitution Hawk says:
    Deregulation didn’t cause any of this, simply because there wasn’t a single regulation that prevented banks from giving loans to people who couldn’t afford them, past governments just figured that banks would have enough common sense to not do that since it would be so devastating obviously. I also want to point out that the deregulation you are referring to was done so under Clinton in 1999, which was a repeal of the Glass-Steagall Act. The reality is that this recession is a prime example of how devastating it can be when big business and government collude together. If you think for a second that AIG didn’t know they were insuring faulty loans you are as naive as Democrats need you to be. Chris Dodd and Barney Frank are the real culprits here. We got one out of office, now we need to get the other.
  16. DarwingotnastyontheBeagle says:
    Partly caused by banks approving loans (with the backing and urging of the gov/lobbyist all democrats) to people who couldn’t afford to pay them back
  17. smsmith500 says:
    It was caused by Democrats. Were the regs being followed when that BP well blew up?
  18. Defender of Capitalists and Straights says:
    No, it was the banks fault. Regulation would have little or no economic growth.

Leave a Reply

Connect with Facebook

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Not finding what you're looking for?
Do a custom search of our entire site:

Get Adobe Flash player