Those Republican "borrow and spend"/anti-regulation ideals at work!
More, plus video here.
Also, for a little hindsight on how this could happen...
The rest is here.
Quote:
| Financial expert Zuckerman appeared on Morning Joe to talk about the Federal bailout of Fannie and Freddie Mac - a move that he estimates will cost the taxpayer upwards of $500 billion added to an already record federal debt. The panicked looks on the faces of the hosts as he laid out just how bad it could be were the most vocal commentary though. Zuckerman says that Fannie and Freddie are “too big to fail” because their paper is held by financial institutions worldwide and if they fell then the world economy would plummet like a stone in a “systemic crisis”. But he also says that “this is not the end of the real problem”, which is $5 trillion plus in mortgage loans with record foreclosures and falling house prices. In other words, America’s piggy bank is broken. Zuckerman says that no-one should think the bailout is the end of the story: “this problem is still not measurable, we still don’t know where the bottom is,” and that the only way out in the long term is to “force savings upon the American people, and that’s called taxes.” We’re already seeing the immediate results of the the credit crunch. For instance the Highway Trust fund, which pays for infrastructure repairs and improvements, is almost broke. It’s funded by the gas taxes it’s tapped out. That has a knock-on in the ability of the federal government to provide construction contracts to businesses and construction jobs to those unemployed, in a time of rising unemployment. The massive amount of money that is going into financial bailouts could have been going to such projects instead, which would have provided some buffering against recession. It’s possible that the Bush administration will ask Congress to give money to the Highway Fund anyway - and it probably should - but yet again someone has to pay the bill eventually for deficit spending and that someone will be you and your grandchildren. Ditto the huge bills for Iraq, massive homeland security and defense spending, the trade deficit and so much else we can thank the profligate Bush administration and Republicans in Congress for. They have, as a solid group, opposed any kind of financial regulation legislation. For Republicans, it’s a free market only until John McCain’s “middle class” with over $5 million in the bank are hurting, then its socialism for the financial markets all around. |
Also, for a little hindsight on how this could happen...
Quote:
| The general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today’s economic turmoil. “A regulatory structure set up for banks in the 1930s needed to change because the nature of business had changed,” the Illinois senator running for president said in a New York economic speech. “But by the time [it] was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework.” Gramm’s role in the swift and dramatic recent restructuring of the nation’s investment houses and practices didn’t stop there. A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm. Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and the Treasury Department about banking and mortgage issues in 2005 and 2006. During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages. For his work, Gramm and two other lobbyists collected $750,000 in fees from UBS’s American subsidiary. In the past year, UBS has written down more than $18 billion in exposure to subprime loans and other risky securities and is considering cutting as many as 8,000 jobs. |
