Although some right wing advocates I have clashed with will find it hard to believe, I want to put partisan politics aside for a moment for the good of our country. Possibly the biggest threat facing our nation is another economic meltdown, which by all accounts would be much worse than the one we have just survived. There are some issues so important that they transcend politics and should bring Americans together.
This is not a democratic or republican issue! It is an AMERICAN ISSUE!
Part of working for what is best for the nation is honesty... the ability to really listen and do objective research to educate yourself on a subject... and if you find you have been wrong about something, admitting it and adjusting. I have just found that I have had some gaps in my understanding of what led up to the financial meltdown. After watching one of the most objective, investigative programs on television, Frontline, I spent time fact checking and researching. I realize that my belief that the wall street and banking scams that led to our problems were almost entirely enabled by republicans... was wrong. Much like Alan Greenspan and others have admitted that their no regulation free market approach was wrong.
The truth is that although money paid to politicians campaigns and gifts by the banks and wall street had a large influence, It seems that ignorance... a lack of knowledge about the taxpayer backed gambling by the banks and wall street was a huge factor.
The truth is almost no one even today understands the web of accounting and mathematical models used to confuse and hide the games played on wall street. Certainly no one in congress or the senate did.
Of course since the derivative market operates in secret, it is impossible to find out what sort of scams they are running. Ergo the "dark derivative market". Did you know that calls for fraud investigations and transparency have been blocked? During both republican and democratic administrations? Greenspan even arrogantly said that wall street and the market would handle fraud problems! We all know how well that worked out.
Something to consider the next time you read some corporate spinmeisters straw man argument about keeping the government out of business.
I think that the best chance of avoiding another financial disaster is to understand in simple terms what led up to the meltdown and the hard facts of what transpired.. not to get lost in a sea of spin and straw men excuses like fanny and freddy or ANY one element. (which is what the Banks and wall street types use as a favorite tactic). As my poly sci professor used to say... "when in doubt or confused... use the KISS method. Keep It Simple Stupid"
In that spirit, I offer a brief objective overview of events leading to the financial meltdown. You decide
First you must understand the most influencial, powerful man in all this for the past four decades was Alan Greenspan. He was economic advisor in 1974 under president Ford. Chairman of the fed beginning in 1987, serving under both republicans and democrats. Greenspan was a disciple of Ayn Rand and modled his policies on her belief that a completely unregulated, laissez-faire approach was the best economic model. It should be noted that after the financial meltdown he recently admitted his economic model and style was wrong and actually led to our problems.
However in 1987 Reagan agreed with Greenspans opinions and the deregulation free market approach began in earnest.
It continued and found new support under president Clinton who appointed Robert Rubin as secretary of treasury. Rubin bought his protegee Larry Somers on board, who served as director of White House economic council under president Obama.
President Clinton on April 18, 2010 said "Rubin was wrong in his advice not to regulate derivatives".
All these people and presidents bought into the deregulation, 'we don't need a cop on the beat' belief.
Now the important part! Not everyone believed that turning wall street loose and trusting them to play fair was a good idea. Open your mind as you read the FACTS about Brooksley Born and why the banks and wall street hate her.
Brooksley Born was a securities lawyer, who was president of the Stanford law review, and graduated first in her class. Smart person.