Obama spoke at Coopers Union (code for communist university) in NYC today. He tried to drum up support for the takeover of the financial industry, under the guise of "financial reform".
"Taking his argument for stronger oversight of the financial industry to the city where the economic meltdown began, Obama said it was essential that we learn the lessons of this crisis, so we don't doom ourselves to repeat it."
"And make no mistake, that is exactly what will happen if we allow this moment to pass."
Obama's quote is correct in one sense, but not how he intended. The financial crisis will in fact continue and be repeated, if corrections are not made. But the corrections needed are not a takeover of the financial industry. The corrections needed are for government to get out of the way, stop interfering with the free market, and repeal the laws that government passed which caused the crisis in the first place.
So, let's look at how we REALLY got to this point.
The Community Reinvestment Act in 1977, thanks to leftist Jimmy Carter, was the start of this debacle. This served as the catalyst for other changes, straight through to leftist Bill Clinton, in which the legislation was changed. Thanks to both of these economically impaired presidents, banks were able to loan money to people who couldn't pay it back.
The difference between the two acts, however, is huge.
Prior to Clinton, banks were not required to make risky loans, but if they did, they were required to carry these loans on their balance sheets. This discouraged banks from making volumes of bad loans, and taking huge risks. So if banks did make some risky loans, and those borrowers defaulted, the banks were able to absorb the losses without going bust.
The legislation signed by Clinton, however, changed everything. Banks were required to make these risky loans, but they were NOT required to keep them on their balance sheets. Therefore, the banks complied with the law, but sold off the risky loans like hot potatoes, as soon as possible.
Where did banks sell off these loans? To Wall Street, of course. Wall Street did what Wall Street does, which is to buy and sell, making money for it's investors. This is the free market enterprise, and investing in something for profit is the whole point in investing in the first place. Making a profit from one's investments is not a crime, unlike the left would have you believe.
These loans became another investment, another item to sell, so they were analyzed, sliced and diced, bought and sold in pieces, and hence we have the birth of the derivative.
Risks were assessed as with any investment. But by now, the trail from an economically flawed government mandate has run cold.
Interestingly, even the NY Slimes reported on this in 1999, and the impact it would have on the economy if things took a turn for the worse.
The left has conveniently shed it's connections to the dirty tricks it played on the economy and refuses to take responsibility for the turmoil and path of destruction that it caused.
What was the left's ulterior motive of these acts?
It was all in the name of stealing from the producers in society and giving it to the looters. It is anti-American. True American values as such that if a person cannot afford to buy something, it means that they can't buy it. But the left doesn't think someone who earns something has a right to keep it. Instead the left believes that those who didn't earn something, have the right to steal it from others.
For the left, it is about achieving their socialist dream, redistributing the wealth of those who have earned it, and giving it to those who have not.
The left continues to proceed on their endless pursuit for destroying the economy and achieving a fictional utopia of marxism. So they implement these catastrophic chaotic policies, then pretend they didn't do it, and declare it is someone else's fault when everything comes crashing down.
It is true. We need financial reform. however, the financial reform does not entail another leftist boondoggle, . The financial reform that is needed is for government to get out of the way, and get out of our wallets.