Well, the bailout bill failed. Of course, it is the Bush administration's fault, correct? Looking back in history, crises are rarely, if ever, caused by the administration in office when the crises happens. Historically, the causes go back one or many administrations and, only after the passage of time, do the results bear fruit. This is in keeping with the principle of 'thinking in the long term'. The long term is usually many years after the actions are taken. Usually when someone else is in office. In that spirit, let's look back at history and find the root causes of our current crises.
I seem to remember some years back someone cry that banks were not making mortgages to the lower income population and that they needed to relax their qualifications. Who was making this noise and actually made it happen? It was Rep. Barney Frank and Sen. Chris Dodd. The exact people who we are now counting on to help us out of this crisis.
Next, the current problems in the mortgage industry are at least 50% the public's own fault. Is there no responsibility on the part of the individual to NOT accept a loan even if it is offered to them? I receive loan and credit card offers in the mail on a regular basis. Do I accept them all? Of course not!! I know what I can and can't afford, manage my own personal finances quite successfully and know when to say NO. Perhaps I should have accepted all those offers. Then I could be crying victim right now. Should there not be some responsibility on the part of the individual to NOT accept a mortgage that they could not pay? I know when I bought my house, I had several mortgage offers in order to choose the one which best fit my needs. Also, I retained my own attorney for the closing to look over all the contracts and protect my interests. My attorney worked for me and no one else. Is this not Buying a House 101?
Finally, has anyone considered the impact of the repeal of the Glass-Steagall Act? What is that, you may ask? It was passed as part of the New Deal and, among other things, created the FDIC. That is not the important part. The other things are. It prohibited banks from owning and/or creating investment firms. You know, the division of the banks causing them all to fail or be near failing right now? In addition, it also prohibited banks from being involved in speculation. Again, one of the main causes of our current problems. And, of course, it was a GOP administration that relaxed these controls, right? Sorry, it happened in 1999 and none other than President Clinton signed it in to law. This had the effect of directly creating the sub-prime mortgage industry, which is at the foundation of the current crisis.
Therefore, before simply blaming the current administration for any issues, let's look back at the history and the root causes. Crises rarely are caused by whoever may currently be in office, but most often by previous office-holders. I do not care who was in office when, since I do not credit Reagan with the release of the Iranian hostages. It was Carter's work and credit was given to Reagan somehow. I do not think Reagan deserved any of the credit. I say this simply to point out that it does not matter to me party, just who did what.