stahrgazer wrote:The banking bubble was allowed to burst because BUSH removed some regulations, and removed some oversight that forced appropriate ethics and legalities. The repackaging of debt obligations was legal, but someone was still supposed to hold back sufficient funds to back those obligations, and regulations and overseers had been assigned to ensure that occured. When BUSH removed those watchdogs, companies that were doing the repackaging and selling Collateralized Debt Obligations, started to conveniently forget to hold back funds to cover the debts. Furthermore, they increased the risks by packaging many less secure loans with a few more secure loans, and calling them the lesser risk rather than admitting these packages had more risk than they were admitting.
As you said to someone else, these facts are all out on the web, look them up.
Then, when folks who owed the monies lost their jobs under Bush because plants closed in America to "expand" to various overseas locations (which Bush did nothing about and in fact, even backed legislation that made those moves more profitable for those once-American companies) the shady stack of cards BUSH allowed to build, collapsed.
Additionally, printing a bunch of money and making a stimulus was Bush's idea, only where he put the money didn't stimulate at all. So, Obama gets blamed for printing a little more money for a second stimulus that worked a little but not quite enough - or not quite enough yet.
Again, facts, look them up, Night Strike, rather than parrot Rush Limbaugh's distortions of the truth.
Finally, check your economics. It takes time for a financial cause to achieve effect; there's years of lag - it used to be 8-10 years, although that's lessened a little. Basically, Bush's policies in 2004 and 2005 caused what occurred in 2008 and 2009, and what Obama did in 2008 are finally starting to achieve some results in 2012.
Obama kept us from being totally snowed under the avalanche Bush's policies caused; it's not his fault that time takes time, and reverting back to the very policies that caused the avalanche would finalize our country's economic ruin.
I did some fact checking here, following stahr's advice to look things up.
There are approximately 140 financial institutions that failed in 2008/2009. The causes were attributed mainly to the poor economic climate and all bank failures involved a fall in capital which caused the banks to be unable to meet their financial obligations. So what caused the financial crisis? First was the collapse of the real estate market. When people defaulted on mortgage loans, banks begin to experience capital flow problems. As mortgage-backed securities fail, the economy goes down.
But let's look at the idea of bank deregulation and whether Bush is the only one at fault (Stahrgazer's opinion). Let's see who is to blame (all of this information is easily accessible on the internet):
(1) The Federal Reserve slashed interest rates after the dot-com bubble burst, which made credit cheap.
(2) Home buyers took advantage of easy credit to bid up the prices of homes excessively.
(3) Congress supported a mortgage tax deduction that gives consumers a tax incentive to buy more expensive homes.
(4) Real estate agents earned higher commissions from selling more expensive homes.
(5) The Clinton administration pushed for less stringent credit and down payment requirements for working and middle-class families.
(6) Mortgage brokers offered less-credit-worth buyers subprime, adjustable rate loans with low initial payments.
(7) Alan Greenspan near the peak of the housing bubble in 2004 encouraged Americans to take out adjustable rate mortgages.
(8) Wall Street firms paid little attention to the quality of the risky loans that they bundled into mortgage backed securities and isused those securities as collateral.
(9) The Bush administration failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market (This is stahrgazer's only reason for the financial collapse).
(10) An obscure accounting rule called mark-to-market.
(11) Collective delusion that home prices would keep rising forever.
Let's talk about Bush's actions specifically since stahrgazer brought it up:
The deregulation law in question was sponsored by one Senator Phil Gramm. The law is called the Gramm-Leach-Blilely Act which was passed in 1999 and repealed portions of the Glass-Steagall Act (from the Depression which imposed a number of regulations on financial institutions). The bill passed the 362-57 with 155 Democrats voting for the bill. The Senate passed the bill 90-8, including a vote from Joe Biden (the current vice president serving under President Obama). The bill was signed into law by George Bush. Oh wait, no it wasn't. It was signed into law by President William Jeferson Clinton, a Democrat. Furthermore, economists on both sides of the spectrum indicated that the law probably made the crisis less severe than it might otherwise have been. For example, Robert Kuttner, a liberal economist, wrote that he blamed the financial deregulation of the 1970s and blamed the policies of the federal reserve under Alan Greenspan. For example, former Clinton Treasury official Brad DeLong praised Gramm-Leach-Bliley as having softened the crisis. And finally, for example, Bill Clinton who signed the law said that he has no regrets about signing it, going so far as to say "But I can't blame the Republicans."