Only in America

In the 1990s, the Democrats wanted banks to stop "redlining" and offer mortgages to poor people so they could buy houses.

So banks did.

And then to "reduce" the risk of loaning money to people who couldn't afford it, they created exotic financial instruments that were supposed to make the loans to poor people less risky.

Poor and lower income people, people who shouldn't have been able to buy a home with their level of income and savings, bought homes. Created a housing bubble.

The bubble popped.

Banks and financial institutions were in trouble because they were holding these mortgage loans on people who couldn't afford them.

So our politicans, the same ones who pushed the banks to make loans to the people who couldn't afford them (ie the poor), now attacked the banks for offering loans to people who couldn't afford them. And made it sound like the banks were in some scam to bilk the lendees. And the politicians (especially the liberal Democrats) absolved themselves of the blame.

The banks got bailed out. They got attacked for making risky loans to people who couldn't afford them. And tightened their lending standards.

Now the politicians are saying that the banks need to lend more to Main Street America, even if it means lending to risky lendees and offering them loans that they can't afford to pay.

Isn't this how we got into this mess in the first place?

POST A COMMENTBonusOnus(02/02/2010)
I stand corrected. The banks are lending. They have capital reserves after being backed by us, the taxpayers.

But they're only lending to the US government (via bonds).

The banks get loans from the US government at almost 0% rates. Then they turn around and buy US bonds that offer them about 3%.

So they're making about 3% by returning the money to the US government. And paying big bonuses for that.

This has got to be the stupidest financial bailout in history.

Wage Slave(02/02/2010)
Corporate America owns this country, the Democrats and the Republicans. Don't be confused by the Republicans v. the Democrats shell game. It's just smoke and mirrors.

The wealthy contol the market and didn't lose as much money as the poor schlubs with their 401k's. The stocks available to the average 401k participant were garbage with no hope of growth. Hedgefunders controlled gas prices when they were ridiculous.

As long as we bury our heads in the sand and point fingers; it's the Democrats fault or it's the Republicans fault, corporate America and the ultra wealthy will get away with ruining this country.

Both the Dems and the GOP have a hand in the current mess.

BonusOnus(02/09/2010)
I'm pointing fingers at both parties. The Democrats had a hand in the housing bubble because it was because of their policies that led to people getting mortgages that couldn't afford them.

I also blame the Republicans for quickly moving to bail out the banks and Wall Street firms because they were "too big to fail". By doing this, they let Wall Street keep their profits when times were good but bailed them out when times got rough. This is NOT FREE MARKET economics that Republicans are supposed to support!

I don't know who's dumber - the Republicans who think bailing out corporate America is "free market" economics. Or the Democrats who think that their party isn't beholden to corporate interests like Republicans do.



econobiker(02/09/2010)
Remember that Republicans only think welfare is wrong when po' folks get it versus tax credit, training credit, stimulus fund etc type welfare for mega corporations.

I am currently reading the 1977 book by John Kenneth Gailbraith "The Age of Uncertainty" which predicted our most recent corporate situation but only 30 years ago.

Also the term "too big to fail" used to mean a "monopoly" which needed to be broken up.

"Teddy Roosevelt where are you now?"

BonusOnus(02/10/2010)
You're right econobiker. Republicans only think it's wrong if poor people get welfare.

Republicans have no problem when corporations get welfare. And these corporations get billions.

Unfortunately, Democrats don't have a problem when corporations get welfare either.

Here's a little secret.

Corporate welfare (tax breaks, subsidies, bailouts) DWARFS the social welfare programs.

A free market advocate can't possibly justify giving welfare to corporations that are *making* millions in profits.

POST A COMMENT»

JobSchmobber Community Comments