YouTube - Burning Down The House: What Caused Our Economic Crisis?

Factual and true information, well documented in recent history, demonstrating who is responsible for the current financial crisis... The Obama ‘congregation’ hates true facts when it makes McCain look good. They won’t be able to dispute accurate historical facts, so get ready for them to attack you personally and try to maneuver this thread to off topic subjects.

I wondered why the dems where so eager to bail "Bush's problem" off the table so fast. The longer it hangs around the more light gets shed on who the real culprits are. If it holds for a while the undecideds will find who is to blame. Sweep fast dems.

If I say, the sun rose in the east this morning. This is a verifiable fact.

If I say, I had a car accident this afternoon, that is also something which could be verified.

If I say the sun rose in the east this morning and it caused me to have a car crash this afternoon, that would be faulty logic.

THis logic is similar to the logic behind how the CRA caused the economic crisis.

While the CRA may have been a minor link in the chain, it is deregulation--the Gramm act--which is more responsible.

Good answer. Ignore the facts.

Gramm-Leach-Bliley Act - Wikipedia, the free encyclopedia

The bills were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This veto proof legislation was signed into law by President Bill Clinton on November 12, 1999[1]

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.[2]

[edit] Changes caused by the Act

Many of the largest banks, brokerages, and insurance companies desired the Act at the time. The justification was that individuals usually put more money into investments when the economy is doing well, but they put most of their money into savings accounts when the economy turns bad. With the new Act, they would be able to do both 'savings' and 'investment' at the same financial institution, which would be able to do well in both good and bad economic times.

Prior to the Act, most financial services companies were already offering both saving and investment opportunities to their customers. On the retail/consumer side, a bank called Norwest which would later merge with Wells Fargo Bank led the charge in offering all types of financial services products in 1986. American Express attempted to own almost every field of financial business (although there was little synergy among them). Things culminated in 1998 when Travelers, a financial services company with everything but a retail/commercial bank, bought out Citibank, creating the largest and the most profitable company in the world. The move was technically illegal and provided impetus for the passage of the Gramm-Leach-Bliley Act.

Also prior to the passage of the Act, there were many relaxations to the Glass-Steagall Act. For example, a few years earlier, commercial Banks were allowed to get into investment banking, and before that banks were also allowed to get into stock and insurance brokerage. Insurance underwriting was the only main operation they weren't allowed to do, something rarely done by banks even after the passage of the Act.

Much consolidation occurred in the financial services industry since, but not at the scale some had expected. Retail banks, for example, do not tend to buy insurance underwriters, as they seek to engage in a more profitable business of insurance brokerage by selling products of other insurance companies. Other retail banks were slow to market investments and insurance products and package those products in a convincing way. Brokerage companies had a hard time getting into banking, because they do not have a large branch and backshop footprint. Banks have recently tended to buy other banks, such as the 2004 Bank of America and Fleet Boston merger, yet they have had less success integrating with investment and insurance companies. Many banks have expanded into investment banking, but have found it hard to package it with their banking services, without resorting to questionable tie-ins which caused scandals at Smith Barney.

[edit] Remaining restrictions

Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the CRA.[3]. This was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements." [4]

The GLBA also did not remove the restrictions on banks placed by the Bank Holding Company Act of 1956 which prevented financial institutions from owning non-financial corporations. This is significant because this restriction prevents an ownership structure similar to Japan or Germany in which banks own the majority of large industrial enterprises. It conversely prohibits corporations outside of the banking or finance industry from entering retail and/or commercial banking. Many assume Wal-Mart's desire to convert its industrial bank to a commercial/retail bank ultimately drove the banking industry to back the GLBA restrictions.

Some restrictions remain to provide some amount of separation between the investment and commercial banking operations of a company. For example, licensed bankers must have separate business cards, e.g., "Personal Banker, Wells Fargo Bank" and "Investment Consultant, Wells Fargo Private Client Services". Much of the debate about financial privacy is specifically centered around allowing or preventing the banking, brokerage, and insurances divisions of a company from working together.

In terms of compliance, the key rules under the Act include The Financial Privacy Rule which governs the collection and disclosure of customers’ personal financial information by financial institutions. It also applies to companies, regardless of whether they are financial institutions, who receive such information. The Safeguards Rule requires all financial institutions to design, implement and maintain safeguards to protect customer information. The Safeguards Rule applies not only to financial institutions that collect information from their own customers, but also to financial institutions – such as credit reporting agencies – that receive customer information from other financial institutions.

Gramm Act was infused by the dems to have institutions make risky loans.

Yeah... E_O left out the part where liberal Democrats forced the sun to rise in the east.

Did you take the time to see the video or read the information about the Gramm Act or are you just spewing the lib line?

Great stuff. That video is well done and if McCain wants to win he needs to communicate the FACTS that are out there. Unfortunately, I think he will be too much like Bush and try to take the "high road" in all this. Now is the time to get down and dirty and communicate how and why this problem started. It's not 8 years of Bush's "failed policies", but 30 years of failed a liberal agenda.

Ugggh, more right-wing C&P crap. Don't the authors of the video think we'll notice the ridiculous grasping at straws of blaming an act (CRA) passed in the late 1970s and a minor revision in the mid 1990s for a disaster that hit at the end of an 8 year Republican Presidency in 2007-2008?

The people the CRA are aimed at were only a TINY percentage of the problem in terms of dollars. The vast majority of the problem were non-poor and non-minority people who COULD afford homes in non-distressed neighborhoods (therefore not related to the CRA), but used the low interest rates and assumption of a continuing housing bubble to buy homes well above what they could afford on introductory ARM rates.

Even if you deny the simple fact that the vast majority of the bad loans were not subject to CRA, saying the housing bubble was somehow caused by the CRA is a huge stretch. In reality, here's a good summary of the causes: Causes of the United States housing bubble - Wikipedia, the free encyclopedia

You'll notice the CRA is nowhere to be found in there. In reality, the reason things started falling apart in the mid 2000s was massive deregulation so the lenders could make more risky loans (such as liar loans), and of course deregulation is a basic GOP platform! For example, my sister and her husband (who were in their 20s at the time) bought a house in the mid 1990s and they had to put 20 percent down, carefully show their salaries and a strong job history, and the lender strongly recommended a 30 year fixed rate. When I was in my late 20s back in 2004, I could have gotten a nice house with no money down, not give them my salary, and they kept trying to get me to get a low introductory ARM (fortunately I knew better and I'm still in my house with no troubles). Everyone knows these practices started around 2000. If the Republicans had not stripped away all the rules and regs over the last decade, I would not have had that experience.

Also the housing bubble was really expanded by Greenspan's decision in 2001 to lower interest rates near zero to try to jump-start the economy after the dot-com bubble burst. Essentially create a housing bubble to prop up the economy after the dot-com bubble was gone. At that point people were basically wildly speculating on home prices.

Finally, it's ridiculous to say that Freddie and Fannie have showed preferred treatment to Obama and McCain can come in on his white horse and save us all, when in reality (as it has already been pointed out many times) McCain's senior advisor Rick Davis was being paid $30k/month up until last month to do nothing but lobby the Senator on behalf of decreased regulation for FM/FM: http://www.nytimes.com/2008/09/22/us.../22mccain.html (so much for the maverick!)

On to the next C&P slanders and smears from the right-wing...

It's funny that the free market has done well without government intervention since the last Great Depression. Only when the federal government got into social activism and forcing the free markets to make unreasonable loans for the bottom to drop out. It's also funny that the dems are falling all over themselves to pass this bailout bill while putting more pork into such groups as ACORN. Could it be that no one will notice if done quickly?

Follow the money baby....follow the money..

Great video. It's got some pretty damning stuff. I wonder how the Democrats will answer?

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The libs on this forum are already giving you a glimpse into the reaction."Ignore the man behind the curtain"!!!!! George Bush! Iraq (but only from 03-07)!! Tax Cuts for the rich caused this!!!!

I don't know how the "libs" --whoever they are-- will answer.

I do know that there are many people desparate to deflect responsiblity for the Policies and oversite led by, created by, and precided over by the GOP.

I also know that you can always tell when the GOP is in trouble because they start to blame the poor, the middle class, and everybody but the hogs slopping at the welfare entitlements for the rich trough at the top.

But, beleive what you will.

For the record I did watch the video but I knew about the Gramm act, the CRA, and the efforts of those behind the first to blame the second already.

So, no revelations here.

It's also not an issue with much legs.

And the current cumulative polls have Obama up .7 points from Friday.

RCP Polling Data
Poll Date Sample Obama (D) McCain (R) Spread

RCP Average 09/21 - 09/27 -- 47.9 43.1 Obama +4.8

Gallup Tracking 09/25 - 09/27 2719 RV 50 42 Obama +8
Rasmussen Tracking 09/25 - 09/27 3000 LV 50 44 Obama +6
Hotline/FD Tracking 09/25 - 09/27 914 RV 47 42 Obama +5
GW/Battleground Tracking 09/21 - 09/25 1000 LV 46 48 McCain +2
CBS News/NY Times 09/21 - 09/24 LV 48 43 Obama +5
FOX News 09/22 - 09/23 900 RV 45 39 Obama +6
Marist 09/22 - 09/23 689 LV 49 44 Obama +5

Nope. Instead, it was the responsibility for the Republicans while they held majority rule under Bush to correct whatever they thought were mistakes comitted under President Clinton with the financial system. But they wouldn't do it. And so Republicans thought it was just fine for interest rates to sink to record lows without further regulation needed. Firms like Lehman Bros. got by with trafficking securities with only 5% collateral required. Republicans didn't blow the whistle on that dangerous practice. Meanwhile, I couldn't get a loan for $15,000 at my bank to finish paying off my newly built house because it was against regulations to use an IRA for collateral.

Now the Republicans want to get behind a man, McCain, who declared shortly before the debate that America's economy is fundamentally sound. After nearly 7 years of Bush what a shame that the Republicans didn't find anyone who has better sense than McCain, I mean McCain't.

And you don't know who the libs are?

<<If I say the sun rose in the east this morning and it caused me to have a car crash this afternoon, that would be faulty logic.>>

Where I live, during my temporary exile from the Great State of Oklahoma, they report "glare" volume in the morning traffic reports. The glare is from the sun coming up or going down and shining in motorists' eyes. We have a lot of accidents at certain parts of the Washington DC beltway attributed to sunlight in motorists' eyes, morning and evening.

Little bit of trivia.

As always you put things in perspective.

So in DC the sun rising in the east causes car crashes in the afternoon?

Does glare really last that long in DC? How does anybody drive anywhere if the morning sun blinds them all day?

Speaking of being blind, the CRA is the single cause of our the economic crisis. That and the tooth fairy, santa claus, and the Easter bunny.

As for the "libs," would that mean "librarians?" I've suspected the secret society of evil book organizers are behind all kinds of evil.

If you mean that mythical breed blamed for everything including Limbaugh's fondness hard drugs and inability to mate with a woman (that's mate as in pair although I've heard rumors...) then I think I know who you are talking about.

That would be the libertarians, right?

The Rick Davis New York Times story is completely false. A lie.

Which story would that be?

This post is a complete lie.

^ Logic divided by zero.

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