The Financial Crisis Inquiry Commission Chaired by Phil Angelides wrote a report that seems well researched and well written. The economic crisis was caused by lax regulation and by greed. This grand theft in the financial markets caused at least half of the current California economic crisis. If the Tea Baggers opposed the financial bail outs, I am waiting to see if they will support the arrest and prosecution of those who caused this crisis. I haven’t seen any support for justice yet. They only want to attack an African American President, not the people who caused the problems.
California is suffering a severe recession. We need to build the promise of California to recover from the economic crisis of 2007/2009. Wall Street has recovered, but we still suffer 12.5 % unemployment.
That promise is a good job for all and the opportunity to have a rewarding career. That is how people become tax payers. The austerity paradigm being promoted by the Republicans is the same policy that produced the economic crisis in the first place. The tax and budget cut mania proposed by the governor does not promote good jobs and a recovery. It will make the recession worse.
Financial Crisis Inquiry Commission
As this report goes to print, there are more than 26 million Americans who are out of work, cannot find full-time work, or have given up looking for work. About four million families have lost their homes to foreclosure and another four and a half million have slipped into the foreclosure process or are seriously behind on their mortgage payments. Nearly 11 trillion in household wealth has vanished, with retirement accounts and life savings swept away. Businesses, large and small, have felt
the sting of a deep recession. There is much anger about what has transpired, and justifiably so. Many people who abided by all the rules now find themselves out of work and uncertain about their future prospects. The collateral damage of this crisis has been real people and real communities. The impacts of this crisis are likely to be felt for a generation. And the nation faces no easy path to renewed economic strength…
While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubble—fueled by low interest rates, easy and available credit, scant regulation, and toxic mortgages— that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world. When the bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions that had significant exposures to those mortgages and had borrowed heavily against them. This happened not just in the United States but around the world. The losses were magnified by derivatives such as synthetic securities.
The crisis reached seismic proportions in September 2008 with the failure of Lehman Brothers and the impending collapse of the insurance giant American International Group (AIG). Panic fanned by a lack of transparency of the balance sheets of ma- jor financial institutions, coupled with a tangle of interconnections among institutions perceived to be “too big to fail,” caused the credit markets to seize up. Trading ground to a halt. The stock market plummeted. The economy plunged into a deep recession.