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Posted by David Sherman on Monday, March 09, 2009 at 16:52:41 :
In Reply to: Re: Inflation posted by Kaegi on Monday, March 09, 2009 at 16:10:07 :
I'm not usually very partisan, but with everybody on the news blaming Bush for the crash, you make a good point that it was Clinton who let the banks, insurance companies, and brokerage house get into each other's business, which was something that was deliberately banned during the Depression for reasons that were obvious then, but we seemed to have forgotten about. Also, it was Lyndon Johnson who semi-privatized the government mortgage insurers (fannie mae, etc) to as to get their liabilities off of the government's books so his Great Society spending programs wouldn't look so expensive. Let's remember also that it was Democrats who pushed the quasi-governmental mortgage companies to make loans to people who couldn't afford them, in the context of giving the poor the pride of home ownership, etc.
On the Republican side, I remember not very many years ago there was quite a push to allow the state (Washington) to invest its pension funds in the stock market where they'd earn an easy 10% rather than in bonds that paid a lot less, and at the same time, there was a big push to privatize social security, allowing people to invest their social security withholdings in stocks. Thankfully neither of those ideas got passed, or we'd all be in a lot bigger mess than we already are.
It took both parties many years to get us to this point, and nobody wanted to stop it while the money was rolling in. I don't think it's any coincidence that we had to wait until the people who remembered the Depression were all dead, or at least no longer working in government and industry, before we could remove the safeguards they'd put in place and recreate our own version of the roaring '20s. I suppose in another 70 or 80 years, another generation will go through the same ordeal.
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