The problem is what financiers have said for centuries — he who controls the purse strings controls the politics. Periodically people force the financiers back from the front line of politics, but they always come back.
I get emails from all parts of the political spectrum and I read all of them with a giant scoop of skepticism because they are filled with opinions based on (a) the opinions of others and (b) tribal loyalty to some group.
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None of them are based on a knowledge of history, and in particular, financial or economic history.
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A recent email I received echoed others in blaming only the Democratic Presidents for a problem that started with both Democratic (starting with Clinton) and Republican (starting with George W Bush) presidential administrations. (To be fair I get emails from people who blame only Republican politicians. My answer would be the same).
Here was my reply:
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Despite your obvious distaste for anyone from the Democratic party, if we are going to stick with the facts and not just opinions, the truth is that the Federal government literally bought into the securitization scam under the administrations of George W Bush, Barack Obama, Donald Trump, and Joseph Biden. Throwing money into the economy under the guise of “buying” worthless certificates artificially propped up the “market” for the certificates that were labeled as MBS.
*It may be true that there are numerous actions and decisions predicated on the covering of asses, but let’s not forget how this started and how it was propagated by Wall Street making threats against any administration that wanted to hold them accountable.*The closest analogy is the Mississippi Bubble in the 1700’s because that was the only other time that the Federal government (in France) literally bought the worthless stock that was being created, traded, bought, and sold on a closed market in which the price was completely hypothetical. The hysteria that led to buying the shares such that the price grew around 2500% was a problem but not an insurmountable problem. People lose money all the time through bad investments or bad timing.*The problem was that John Law decided to double down on the crisis and literally invest all national French credit and assets into the Ponzi scheme. The result, as any historian will tell you, is that France lost its position in world commerce and the US dollar eventually became the reserve currency of the world after some gyrations and experimentations with other currencies that were not as stable (see the British pound).*The Federal Reserve announced that it was buying trillions of dollars worth of MBS “certificates”, knowing full well that (a) they were not mortgage-backed securities, (b) the Fed had no intention of enforcing them, and (c) that it was debasing the US currency in the exact same way that Law did in France — printing money to cover unrecoverable losses.*It is incorrect to blame Democrats, Republicans, and independents for undermining our economy, which continues because we still have not colelctively learned anything about the truth behind what is falsely labeled as “Securitization.”*The problem is what financiers have said for centuries — he who controls the purse strings controls the politics. Periodically people force the financiers back from the front line of politics, but they always come back.*The solution is to impose minimum standards of knowledge on anyone who would make policy regarding these issues instead of leaving it to ideologues who know nothing about what they are saying. The continuing solution is to impose minimum standards of continuing education in finance and other topics, just like we do with every other licensed professional.If I don’t meet my CLE requirements, my license is suspended. It seems to me that the same requirement shod be imposed on people who make laws and enforce laws and not just the people who argue about the laws.
Filed under: foreclosure |
Irrelevant who started the scheme. Agree – both Dems and Reps involved in deregulation, pilot program Regulation AB, and the sale of America to foreign countries. Politics. However, it is the settlements with the big banks – which ignored the victim homeowners that is most relevant. I watched as one by one the victim homeowners were hung by those in control at time of settlements and thereafter. There can be no dispute to this. Those settlements threw victims under the bus, destroyed families, destroyed the ill and elderly, destroyed children, and is destructive to our culture in general. Unless one can undo the settlements – there is only one place for blame – those in control of settlements. Sorry. It is the way it is. Government relied upon the people being stupid. Only a few fought back as the damage has been long done by settlements. WRONGFULLY DONE – the settlements. No way to unwind. Don’t care if GOD becomes next president – he can’t fix it. Damage DONE. BAD SETTLEMENTS. PERIOD. One had no choice – get a bogus loan mod (most often denied) – or, fly the coup for foreclosure. The people are the victims. Never see that addressed. Crisis was exploded by the invalid RMBS that did not comply with Regulation AB – not for any other reason. NOT the people’s fault. There must be some way to get dignity back. The people did nothing wrong but their lives destroyed.
“. . . same requirement should be imposed on people who make laws and enforce laws. . .” Excellent, excellent commentary Neil – too bad those in upper echelons don’t bother to become informed. They should all return their salaries to the American People who are becoming more educated than those in power. Thanks as usual Neill!
Personally…. I kinda prefer the “Tar & Feather” method myself… but hey… that’s just me.