The Housing Meltdown should never happen AGAIN

How we got here

  This bubble was building primarily since the mid-90’s when many politicians in Washington began pushing banks to lower standards.  The banks, mortgage companies, insurance companies and etc are also guilty of putting regular Americans at risk as well.  In the end however its the American home owner and American taxpayer who has taken the brunt of this storm.  Government is supposed to protect us all, not get in bed with those who caused this mess and then blame them for it.  In the end nobody in Washington comes out clean in this, both Democrats and Republicans stood by counting the coffers for their next election.  If you are foolish enough to believe this is all George Bush’s fault you are living in a dream world. He played his part in this but only one character of many who failed the American public so many times.  We have a chance to make them do what they swore to do, uphold the Constitution and protect every American from this ever happening again.

The birthplace of this disaster 

  I have had this argument with several people about Fanny and Freddie being the heart of this problem.  They have argued that the 1977 Community Reinvestment Act which birthed our current situation with Fanny and Freddie.  The act itself didn’t create the problem it just gave the foundation to those who would build a house of cards over the next thirty plus years that would come crashing down.  The problem begins when you guarantee loans with tax payer dollars and keep lowering who can qualify for home loans.  Everybody deserves a house of their own, you must however be able to pay for that home you have purchased.  We must have some responsibility ourselves when making a purchase of this size of can we afford it.  Our Federal Government should get out of the business of guaranteeing home mortgage loans forever.  It just allows banks and mortgage company’s to make risky loans because there is no consequences of their actions.

Sheep led to Lions

  The Gramm-Leach-Bliley Act of 1999 amended the Glass-Steagall Act of 1933 to allow banks to consolidate into one bank.  I’m no big fan of FDR but this however was probably the best idea about controlling banks from becoming too big.  This allowed commercial banks, investment banks, securities firms, and insurance companies to consolidate into one company.  This act in my opinion is the biggest factor in the financial and housing meltdown.  It put the whole financial system in jeopardy because all of these different types of investments were grouped together.  The vote was 343-86 (|Republicans 205–16; Democrats 138–69; Independent 0–1) in the house. The Senate vote was just about along party line 54-44 with only on Democrat voting in favor of the act. After they made adjustments to the bill it was 362-57 in the house and 90-8 in the Senate, then Bill Clinton signed it. We have been sheep to them ever since and don’t you believe otherwise.

  This act which amended Glass-Steagall sending us down the path of our meltdown was done by Democrats and Republicans.  When they say that Republicans are for Wall Street, just remind the Democrats of this act, which they supported and Clinton signed. It was Thomas Jefferson who said “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. “  This wisdom from a man who could probably never imagined how powerful banks and corporations would become.  In the end there isn’t one factor that caused this problem, there was many factors leading us down this path.  I believe this act however should be repealed and the banks shouldn’t be allowed to combine into these too big to fail banks.

Blaine A Dunning

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About blained13

I'm from Mesa,AZ and very involved in local politics. I like to read, like just about all sports and also hunt/fish.
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