The S&L Crisis, Part Deux

For those who don't remember, I offer a history lesson (as well as a political one). Up until the last year & 1/2, Congress has been controlled by the Republican Party--for 16 years! For the last 4 or so years, all THREE branches of government were Republican controlled. Right now, the Dems have a 1 vote lead in Congress--and you can't count Lieberman, because he's really a Republican in a blue coat. In order to override presidential vetos, you need 2/3 of Congress to agree--well, we ain't there yet folks. Bush likes to veto and he likes to do signing statements, changing many of the laws in favor of deregulation.

Now for the history lesson. If you were cognizant during the 80's, you might recall the S&L Crisis under Reagan. If not, go to http://www.uwsa.com/issues/cfr/quicksandl.html (or do a Google search on the S&L Crisis). Lending requirements were loosened, enforcement & oversight were reduced, etc. Foreclosed homes were placed under the RTC (Resolution Trust Corp) for auctioning instead of handled by local real estate offices. The result was things like $200,000 homes selling for $1200. In some cases, those winning the auctions had ties to the current administration (George Bush senior was one of them). One of the failed Colorado S&L's was run by, can you guess who? Jeb & George Jr. John McCain was one of the notorious Keating 5 that led to the crisis in the first place--and it cost the taxpayers over $124 Billion!

Fast forward to 1999 & we see history repeating itself. The Republicans once again began easing regulations such as Glass-Seagull (passed in the 30's to stop this sort of thing). Republicans had been chipping away at it in 1983 & 1987. Gramm-Leach-Bliley eliminated the rest of the New Deal regulations, leading to a massive amount of consolidation within financial markets. The result was risky investments designed to maximize profits.

So, here we are all over again. Another Bush in office, a series of deregulations by the Republican-led Congress
Look at Enron & Worldcom & ask yourself, "What regulations were passed to avoid this from happening again?" None. Did I mention Gramm is one of John McCain's advisors?

Sources:
1. http://www.progressivehistorians.com/2008/02/how-s-crisis-is-repeating-today.html
2. http://www.uwsa.com/issues/cfr/quicksandl.html
3. http://www.fdic.gov/bank/historical/s&l/slbib9.html
4. http://www.wmsa.net/People/john_mccain/ariz-republic_chap_V_1999.htm