Here's a clue for you; the collapse of the Real Estate market and stock markets was set up when Democrats refused to do anything about Freddie Mac and Fannie Mae when Republicans held their hearings on the matter.
The notion that Democrats would have protected consumers from the eventual collapse due to Sub prime Loans sparked by the CRA and highly leveraged derivatives requires willful denial. Here is a videos and link to the reason for the Lehman Brothers collapse to educate you.
Really? Is this really your official spin of events? So it was all Democrats, because they are tied to Fannie and Freddie right? And they opposed regulation right? So the Democrats would not regulate?
1.) Who controlled Congress from 1994-2006? Republican Party
2.) Who regained control of Congress in 2006? Democratic Party
3.) Now let us look at
H.R.1427 Federal Housing Finance Reform Act of 2007
4.) Now first note the date 5/24/2007 on Bill
HR1427
Now what is the title of HR1427?
To reform the regulation of certain housing-related Government-sponsored enterprises, and for other purposes.
Interesting....shall I continue? Now it would seem that 2007 is a tad late correct? I mean was there anything done before that? Please read below:
Oxley hits back at ideologues
FT.com September 9 2008
...the Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.
The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.
He fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute.”
The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.
Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.
You know Mr. Oxley, of Sarbanes Oxley fame? Funny, this Republican would probably disagree with you here.
But of course even now that we have shown your claim to be patently false, is there anything more to it? I wonder if there is anything of importance that might have happened? I know, how about the repeal of Glass-Steagall Act? Now I am going to assume you know what Glass-Steagall Act did, if not do the research. Now what importance would the repeal of Glass-Steagall have? Well golly, it allowed all the banks and insurance giants to merge up, mix mash, and have a good old time.
[ame="http://en.wikipedia.org/wiki/Elizabeth_Warren"]Elizabeth Warren[/ame], who is one of the members of the Congressional Oversight Panel of the Troubled Asset Relief Program has said on record that the global financial crisis was caused directly by the repeal of Glass Steagall. Now with the repeal of Glass Steagall, we saw the banking industry enter into the market of mortgage-backed securities and collateralized debt obligations. These banks also introduced the adjustable rate mortgages, and of course everyone's favorite predatory lending.
Now Glass Steagall was repealed by the
Gramm-Leach-Bliley Act, which of course is authored by none other than Phil Gramm (R), Jim Leach (R), and Thomas J. Bliley, Jr. (R). This bill passed in the Senate by 53 Republicans and one Democrat in favor; 44 Democrats opposed.
Now I suppose I could initially accept this flawed idea of blame Fannie and Freddie, well that is if AIG, Lehman, Citibank, Bank of America, Goldman Sachs, and just about every other bank did not exist. You see while Fannie and Freddie may have failed this summer, they were after all just two corporations that easily were shored up. The effect would have been similar to the S&L crash. But since the banking, investment, and insurance industry had sunk themselves with the all their schemes, Fannie and Freddie's crash only exposed. If these banking titans were sound, then F&F's failure would have not had a direct impact. Both Nobel economist Paul Krugman and Joseph Stiglitz have said this crash
was a result of the repeal of Glass-Steagall as well.
Also, on
November 5, 1999, New York Times article on this very repeal of Glass-Steagall
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
