One of our readers sent us a link to a story that the Associated Press ran yesterday, December 1, 2008, on how the Bush Administration, responding to pressure from the banking industry, killed proposed regulations that could have lessen the impact of the sub-prime melt down. Here is a quote from the article:
WASHINGTON – The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.
Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.
The problem with Bubble-Boy and his band of merry idiots is that they worshiped at the altar of the supposed free-market and didn't think the government had any role in regulating that market. Except, of course, once the stuff hit the fan, then BB and his friend Henry Paulson couldn't intervene fast enough to save the hide of their Wall Street friends and supporters.
That's what really gets me about these right-wingers. They preach free-market for workers, consumers, and the rest of society, but are more than willing to intervene to help their friends. They won't intervene to protect consumers or workers, but they will intervene to protect AIG. They won't intervene to protect auto-workers, but they will intervene to protect people who made millions of dollars by pushing sub-prime mortgages onto people who didn't have the financial savvy to understand what they were doing.
What you get from guys like Bush and Paulson is free-market for us and socialism for them. Thankfully that approach to government will end on January 20, 2009, a date that can't come fast enough to suit me.