Politics & Government. Economic Rescue Bill Senate Approves 700 Billion Dollar Bailout Plan Much Debate
The economic rescue bill which has been passed by the majority of the Senators is expected to solve the economic crisis that is prevailing in the United States. The 700 billion dollar bailout plan was given a second life on Wednesday and was supported by the majority. Both the parties have supported the rescue bill after much debate on it.
Can Barrack Obama solve the Financial Crisis?
The way I understand it is that in 1999 the Clinton administration increased regulation on banks to force them (or face penalties) to loan more money to lower income families. The result was liberal lending practices for FNMA backed loans that eventually led to subprime loans. Peter Wallison is quoted in the NY times in 1999 as saying "In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
In 2001 the Bush administration tried to remove those regulations forcing banks to do something they did not want to do. This was viewed as protecting rich people and Barney Frank led the defeat in congress and we continued with the liberal lending policies. After that 9/11 happened and Bush spent every last bit of political capital on that and had nothing left to fight the financial issues. As long as homes kept rising we were fine. Now we are not, the subprime crisis set up by the Clinton Admininstration has now caused a financial meltdown (as foretold) and the Republicans are being blamed (more out of ignorance and short term memory from many people) by 8 years of financial policies-- which one. Seriously, the one financial policy they tried to pass to help prevent the problem caused by the previous administration was defeated by the democrats-- this is the results of their financial policy.
That said...Is Barrack enough of an independent person to tackle the financial crisis without being swayed by the "good ideas" of the past that have led to this crisis. Can he avoid the sins of the past even though he has hired former FNMA chairman Franklin Raines who was in charge of FNMA when the regulation instituted in 1999 went into place and spoke so highly of how great an idea it was (lending money to people who can't afford homes sure sounds like a nice thing to do on the surface), and who also left job under ethical allegations on the order of $100 million dollars in spending (in addition to his multi-million dollar salary)?
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
In 2001 the Bush administration tried to remove those regulations forcing banks to do something they did not want to do. This was viewed as protecting rich people and Barney Frank led the defeat in congress and we continued with the liberal lending policies. After that 9/11 happened and Bush spent every last bit of political capital on that and had nothing left to fight the financial issues. As long as homes kept rising we were fine. Now we are not, the subprime crisis set up by the Clinton Admininstration has now caused a financial meltdown (as foretold) and the Republicans are being blamed (more out of ignorance and short term memory from many people) by 8 years of financial policies-- which one. Seriously, the one financial policy they tried to pass to help prevent the problem caused by the previous administration was defeated by the democrats-- this is the results of their financial policy.
That said...Is Barrack enough of an independent person to tackle the financial crisis without being swayed by the "good ideas" of the past that have led to this crisis. Can he avoid the sins of the past even though he has hired former FNMA chairman Franklin Raines who was in charge of FNMA when the regulation instituted in 1999 went into place and spoke so highly of how great an idea it was (lending money to people who can't afford homes sure sounds like a nice thing to do on the surface), and who also left job under ethical allegations on the order of $100 million dollars in spending (in addition to his multi-million dollar salary)?
Additional Details
1 month ago
As Beta said, Obama did not 'Hire' Raines, the source is the Washington Post regarding advising Obama thus he did not pay Raines, but that is irrelavant. His predecessor at FNMA, James Johnson, is a campaign advisor for Obama and also had some shady issues with his post at FNMA that are outside the scope of this. I went down the rabbit hole of blame, and there are several contributors for the financial crisis.
Since we are getting bogged down on some things...the real question here is not whether Obama is trying to come up with a plan for the economy, I think he is asking the right questions, just to the wrong people. Will he be succesful in light of the people he has advising him? The economy is bigger than 1 man, but policy is still critical (e.g. the Glass-Steagall Act in 1933 (repealed by the Gramm-Leach-Bliley Act in 1999))
Since we are getting bogged down on some things...the real question here is not whether Obama is trying to come up with a plan for the economy, I think he is asking the right questions, just to the wrong people. Will he be succesful in light of the people he has advising him? The economy is bigger than 1 man, but policy is still critical (e.g. the Glass-Steagall Act in 1933 (repealed by the Gramm-Leach-Bliley Act in 1999))
No comments:
Post a Comment