Nader: Bank meltdown began with Clinton

[Angus]

Bank Meltdown Began With Clinton, Nader Says

Last updated Thursday, September 18, 2008 9:06 PM CDT in News
By Doug Thompson
THE MORNING NEWS

FAYETTEVILLE -- The road to the current financial crisis on Wall Street began when then-President Bill Clinton signed the Financial Services Modernization Act of 1999, presidential candidate Ralph Nader told a 300-plus member rally at the University of Arkansas rally Thursday.

That bill removed a 60-year ban on investment banks getting into mortgages and other business whose current meltdown is causing those financial institutions to fail, Nader said. News accounts and other records show Nader, who is a consumer advocate, had warned about those dangers as early as 2000, when he testified before Congress in support of an unsuccessful measure for greater government oversight.

Nader brought that issue up, he said, to show the current crisis on Wall Street is bipartisan. The only difference between Republican and Democratic policies is Republicans freely support corporate-friendly policies while Democrats do the same thing out of fear of lobbying groups and lost campaign contributions.

President George Bush "built on what Bill Clinton allowed him to do," Nader said.

Financiers "were jumping out of windows in 1929," Nader said. "Now they ride out of Wall Street in limos with $30 million golden parachutes."

Nader is running as an independent candidate in the election. Petitions have put his name on the ballot in 45 states.

Federal bailouts of threatened financial institutions such as American Insurance Group are announced with no congressional approval "and without congressional hearings," Nader said.

Even President Richard Nixon, a Republican and strong conservative, "signed the Environmental Protection Act, the Occupational Safety and Health Act, the Clean Air Act and the Clean Water Act," Nader said. Since then, Democrats have lost any meaningful distinction from Republicans, he said.

Nader began his speech shortly after 7 p.m. after arriving more than an hour late, skipping a scheduled news conference to speak immediately to the waiting crowd at the rally.

http://www.nwaonline.net/articles/2008/09/19/news/091908fznadarrally.txt

[Maikeru-sama]

Yeah, I read a really good article about a year ago that said alot of the Post-Great Depression mechanisms that were put in place in the 30's to prevent another depression was pretty much done away with under Robert Riech and Clinton.

Im not a financial expert, so I am not sure how true it is. I know Alan Greenspan and his "everyone should be able to get access to credit" mantra also contributed.

[Sasquatch]

Also known as the Gramm-Leach-Bliley Financial Services Modernization Act, sponsored by Sen. Phil Gramm (R-Tx) and James Leach (R-IA),passed by a republican majority Congress, and signed into law by President Clinton.

[ABQCOWBOY]

Also known as the Gramm-Leach-Bliley Financial Services Modernization Act, sponsored by Sen. Phil Gramm (R-Tx) and James Leach (R-IA),passed by a republican majority Congress, and signed into law by President Clinton.

This is not an accurate statement. This bill was designed to allow working men and women the ability to invest and save during good and bad economic times. The bill that opened the door to Investment Banking and Brookerage had been passed years before. Essentially, the relaxation of the Glass-Steagall act had already taken place. The only addition to what was already on the books was the ability for banks to underwrite insurance. The bill that lead us to the misserable mess we are in now was this one.

Community Development Banking and Financial Institutions Act of 1994

[ABQCOWBOY]

I would also add that the Financial Services Modernization Act, originally sponserd by Graham and Leach was not the Bill that was signed into law. It was porkbellied into what exists today. The original version of that Bill was stonewalled by the democrats and Clinton threatened to Veto it outright. The original version of that Bill passed the Senate but was smashed in the heavely Democrat based House. Several concessions were made to get that bill passed. A Conference Committee was conviened to resolve the difference in the proposed bill and the changes the Democrats wanted to have made.

[ThaBigP]

Sorry, folks, but Nader's statement and all the replies in this thread are utterly irrelevent, as none of them address the problem that caused this. Getting investment banks into mortages did not cause this - but policies that made mortages radioactive is what caused this. Through the Community Reinvestment Act (among other regulations), Congress *FORCED* lenders to extend loans to uncreditworthy individuals. You see, Congress got this idea in their heads that to refuse to give a loan to somebody who cannot repay is "discriminatory" and "racist". This started under Carter and was intensified under Clinton. So, subprime morgages were created. Many hundreds of billions of dollars worth of loans were made to invidividuals who could not cover the mortgage bill when the back-loaded (interest only the first year or two, then the principle starts kicking in after) morgage rates kicked up. So long as housing prices kept going up, this wasn't so big a deal, as the owners could sell the homes before forclosure, and even pocket a bit of money in the process. But it was a house of cards, no pun intended. When energy prices started going up, many folks had to bail on their homes, and others who were about to buy a home held off. This softened demand, and housing prices started coming down (refer to Economics 101). When that happened, people could no longer sell out of a subprime mortgage, as the home was now worth less than the rest outstanding on the loan. So they walked away and were forclosed on. And the banks ate hundreds of billions of dollars worth of losses. It's estimated that about a third of all mortgages out there were subprime. That, my friends, made the entire system radioactive. It was doomed to fail from the get go.

[Angus]

And Rupert Murdoch thinks it is Barney Frank's fault:

Murdoch: Obama's economic policies are 'naive'

Murdoch_3 News Corp. chairman and CEO Rupert Murdoch said he doesn't regret the New York Post endorsing John McCain, even as some say the Republican ticket is the weaker choice for voters concerned about the economy.

"I am very worried," Murdoch said during an interview Friday with Fox Business Network. "I like Sen. Obama very much. I have met him. He is a very intelligent man. But his policy of anti-globalization, protectionism, is going to be -- and card checks -- are going to do two or three things. It's going to give us a lot of inflation. They're going to ruin our relationships with the rest of the world. And they are going to slow down the rest of the world, too. And they're going to make people frightened to add to employment. You are going to find companies leaving this country if it's -- if you put a protectionist wall around it. You're going to get -- his policy is really very, very naive, old-fashioned, 1960s."

Murdoch also was asked about the television business, asked if he thinks if GE's CEO Jeff Immelt is being truthful when he says the company has no interest in selling NBC.

"Well, I take his word for it," Murdoch said. "I can assure you, it's not doing as well as it used to do. Not only because of its prime-time ratings, but because of its local stations. I know, as far as we are concerned -- and we compete with them -- that whole local station market is performing very badly at the moment.
Anything that depends on consumer advertising is having a tight squeeze on it."

Murdoch also said that even if GE decided to sell the network, News Corp. would never be allowed to buy it. And NBC Universal's cable networks, he added, are not tempting.

"Take USA Network," Murdoch said. "It's a mature channel. It makes a lot of money. But why pay a high multiple for that when you can't work out how you can double its profit every five years? We like -- we like startups, like Fox News."

Also, Murdoch on the credit crisis: "One has got to go back on this and say, look, this started 15 years ago, with Barney Frank and people pushing Fannie Mae and Freddie Mac to make a lot of bad loans, until they finally had $11 billion -- or nearly $11 billion out there. I don't say all bad, but it became a racket.

On whether government bailouts send to wrong message to the financial community: "I don't think so. I think the people who have done it will have lost a lot of money and their jobs. You know, some of them may even lose their freedom, from what I hear."

On Sarah Palin's call for regulation: “I think they have been sending out different signals, but I think what she says is right. Clearly, there has to be some more regulation, but we have to be careful what that is. It could make things a lot worse. The more you get the politicians in that don't know the first thing about banking, even less than me, and God knows what might come out of it.”

On Secretary of Treasury Henry Paulson’s handling of the credit crisis: “I think Secretary Paulson has done a fantastically good job. Now we have got to get it through the Congress, and that is going to be the nightmare.”

http://www.thrfeed.com/2008/09/murdoch-obamas.html

[BrAinPaiNt]

I thought the free market corrected itself, not the government?

[canters]

The free market would have corrected this, but it would have been painful as all getout. I am a free market guy, but some oversight is needed.

BTW, why was a government backed enterprise giving $$ to politiicans like Dodd and Obama? Seems obvious that this whole thing was corrupt and just existed to enrich politicians..

[BrAinPaiNt]

The free market would have corrected this, but it would have been painful as all getout. I am a free market guy, but some oversight is needed.

BTW, why was a government backed enterprise giving $$ to politiicans like Dodd and Obama? Seems obvious that this whole thing was corrupt and just existed to enrich politicians..

I wish we could fix it so NO businesses could give money to politicians. Maybe we would get a better group of politicians who are actually in it for something besides them money.

[ThaBigP]

I thought the free market corrected itself, not the government?

While that is true, you must keep in mind that what started this mess was the government getting its hands in the market, making it anything but "free". When the government demands you engage in VERY VERY risky business (you know, such as handing money out to folks who have no hope of repaying) under penalty of law for failing to comply, you cannot in all fairness call that a "free" market. It so funny now to see folks running around saying "so much for a free market", or "wow, did capitalism screw this up big time". Also the calls for more regulation... Just damn, folks. Regulation (bad regulation, mind you) got us in this mess. Government should be on the lookout for people engaging in illegal behavior, but not dictating market decisions for the sake of pandering for votes (which is what this was).

[ThaBigP]

I wish we could fix it so NO businesses could give money to politicians. Maybe we would get a better group of politicians who are actually in it for something besides them money.

That requires a rewrite of the constitution. After all, petitioning the government with grievences is one of our rights. Companies, for all intents and purposes, do not really exist. They're just groups of people working together, for profit, towards a common end, such as making automobiles (for example). You cannot run up to a company and hug it, like you can a person, tree, building, etc. Same is true of "special interest groups". They too are just groups of people getting together (this time not-for-profit) for a common cause, like saving the environment or protecting gun rights. Both are entities that in reality exist on paper only. We, and they, agree that they exist, and so conduct business with them, buy their goods and/or services, and sell goods and/or services back to them (as the case may be).

Edit: you seemed to be more concerned with the money aspect rather than merely petitioning. Being that courts have ruled that $ does constitute free speech, that tangles the two together.

[CanadianCowboysFan]

Define irony

Republicans using Ralph Nader as a source to rip the Democrats.

[ThaBigP]

Define irony

Republicans using Ralph Nader as a source to rip the Democrats.

To be fair, I completely disagree with Nader's primise. Yes, he tossed Clinton under the bus, but in my opinion for the completely wrong reason.

[Vintage]

I thought the free market corrected itself, not the government?


Well, your point would hold some merit if we had a free market.