It may have been coincidental that our current financial crisis happened exactly center of a Presidential campaign, but I think the blame game needs to stop, and solutions executed. The problem, however, with all of this happening during an election year, is that our country’s economic future has become political fodder for the candidates. Each one promising to have the right plan of action to restore confidence and their opinions couldn’t be farther apart. Last time I checked, both Republicans and Democrats were suffering from the gas pump to the grocery store to the mortgage department. And also, the last time I checked, both Republicans and Democrats were responsible for the cause and effect of what we are suffering through today.
Senator Barak Obama would like to point out that the Republicans were all about deregulation in the late 1990’s, specifically the repeal of the Depression era Glass-Steagal Act. This act essentially knocked down the wall separating investment banks and depository institutions.
…Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act, which passed in Congress with a 343-86 vote in the House of Representatives, before being sent to conference committee; the final bipartisan bill (Senate: 90-8-1, House: 362-57-15) was signed by President Bill Clinton…
Keywords in that definition, courtesy of Wikipedia, are “bi-partisan” “343-86 passage” and “signed by President Bill Clinton”. Seems at the time everyone was on board with it. It’s easy to look back and employ revisionist history. Having said that, I’m sure the deregulation was not intended to go to the point where certain investment products were devised and sold to the detriment of not only the investors, but the purchasers of said products. For that both parties must share blame.
Senator John McCain had aimed his scope on government sponsored enterprises like Fannie Mae and Freddie Mac for pushing risky mortgage products. And while it is true that Republicans tried to curb some of this lending, at the resistance of the Democrats, legislators on both sides have received over $4.8 million in campaign contributions from these agencies in the last ten years.
Hypocrite: hyp?o?crite (noun) [hippa krit] Somebody feigning high principals. Somebody who pretends to have admirable principles, beliefs, or feelings but behaves otherwise.
Besides, blaming Fannie and Freddie solely for their lending practices is a bit unfair. These agencies certainly contributed their fair share to the problems, yes. But, they got caught up in the business of selling and repackaging mortgage debt into securities in order to keep up with the rocketing share prices of other banks. They were more or less playing catch up within the rules (love them or not) already set in motion.
One of these two men will inherit a serious problem when they take office. I’d like to see a little less politicking and a little more forward thinking leadership.
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