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View Diary: Rubio's big lie: Government created the housing crisis (85 comments)

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  •  But technically it is true, the repeal of Glass- (5+ / 0-)

    Stegal set the stage for what came after. Its like the meme about stealing 716 million from Medicare, techically it was taken from one part but what they failed to mention conveniently, it was plowed right back in to provide better services. They deal in HALF truths and when those don't work they trot out the outright lies, ala Romney. The half truths are the hardest to combat because the minute you have to concede any part of their memes you have lost the battle, but.... doesn't count they have already won.

    The work goes on, the cause endures, the hope still lives and the dreams shall never die. ~ Edward M. (Ted) Kennedy

    by cherie clark on Wed Feb 13, 2013 at 09:35:08 AM PST

    [ Parent ]

    •  There's a special place in Hell (5+ / 0-)

      For Phil Gramm, ex-Senator from Texas, who championed the repeal of Glass-Stegal in the Commodities Futures Modernization Act of December 2000 (lame-duck) Congress.  In addition to repealing Glass-Stegal, Gramm's POS created Credit Default Swaps that were going to be just like insurance policies, but would not be subject to regulation.  
      The DotCom boom created a huge pile of cash that needed to be invested, and the best safest place was US real estate.  Trouble was, they were running out of mortgages to invest in, so they started to relax the standards, eventually ending up with "NINJA" (No Income, No Job, No assets) mortgages.  The theory was that housing prices would continue to skyrocket, and NINJA borrowers could sell out before the bubble burst.    
      All the mortgages and mortgage-backed securities and other "derivatives" were created to soak up the DotCom and Chinese money.  It violated a fundamental trust in our financial institutions that was even worse than Reagan's Savings and Loan debacle.  Yet the Republicans created this "fiscally responsible' meme that is totally out of step with reality.

    •  Please (2+ / 0-)
      Recommended by:
      cherie clark, hnichols

      They deal in HALF truths and when those don't work they trot out the outright lies, ala Romney

      Here is the Senate vote to repeal Glass-Stegal and remember that Bill Clinton signed it, yet Bill Clinton was treated as though he was some kind of conquering hero at the Democratic Convention.

      If the Republican Party exclusively deals in half-truths then at best the Democratic Party has no memory at all -- and in the end it was Robert Rubin who engineered the repeal of Glass-Stegal because without it Citigroup could not do what they had already done.

      I won't be coming home tonight, my generation will put it right - Genesis 9:3

      by superscalar on Wed Feb 13, 2013 at 11:11:37 AM PST

      [ Parent ]

      •  Yes and who is standing in the way of any (1+ / 0-)
        Recommended by:
        hnichols

        meaningful laws or regulations? Certainly some Dems but the overwhleming number of Republicans want a free wheeling banking and investment system. In many ways Clinton is a bad man, not in the same sense as Reagan who was a very bad man, but bad in his decision making. Because I know he is smarter than buying the hyoe we were fed, he has to be complicit. I can forgive him Monica, Glass-Stegal no.

        The work goes on, the cause endures, the hope still lives and the dreams shall never die. ~ Edward M. (Ted) Kennedy

        by cherie clark on Wed Feb 13, 2013 at 11:39:53 AM PST

        [ Parent ]

    •  There is a book called "The Big Short" (3+ / 0-)
      Recommended by:
      Seeds, cherie clark, JerryNA

      that explains in great detail what was going on behind the scenes before the crash. It's not a pretty picture and it has nothing to do with Fannie Mae or Freddie Mac. I have read the book and it is a great read. I highly recommend it.

      http://www.amazon.com/...

      It makes you realize exactly how big a lie the Republicans are telling when they claim government loans caused the crash. I don't know if it's willful ignorance or the hive mind or they're just deceitful. Probably all three.

      •  there was also fantastic reporting from (2+ / 0-)
        Recommended by:
        hnichols, JerryNA

        CNBC, who did a multi-part report on how this developed in the investment banks and hedge funds, resulting in intense demand for shitty mortagages they could package and sell to suckers. The Planet Money crew also did a great series of pieces in 2008 adn 2009, culminating with their purchase of a Toxic Asset and reporting on how it ceased to function at all even after they bought it for 10% of face value.

        ANYBODY claiming Fannie & Freddie caused the financial crisis of 2008 knows they are pushing a lie.

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