Mind and Destiny

“I make no pretension to patriotism. So long as my voice can be heard ... I will hold up America to the lightning scorn of moral indignation. In doing this, I shall feel myself discharging the duty of a true patriot; for he is a lover of his country who rebukes and does not excuse its sins. It is righteousness that exalteth a nation while sin is a reproach to any people.”- Frederick Douglass

Location: Delhi, N.Y., United States

The author and his webmaster, summer of 1965.

Sunday, April 24, 2016

Just A Reminder

It’s important that voters be reminded who was to blame for the economic crisis that our country found itself when Obama was sworn in as president.

“Time” magazine issue of 2/23/09, presented a list of those responsible for that economic crisis.  Ranked at the top of their list was Angelo Mozilo the chief executive of Countrywide Financial Corporate.  Bill Clinton’s name was the only Democratic politician’s name, that appear on their list of 25.  The ranking was the consensus of opinion of 10 business and economics columnist.

Countrywide provided subprime loans for years, but began giving mortgages to people, who couldn’t pay them back and they knew very well they weren’t going to be paid back.  Countrywide was able to securitize those mortgages, by putting them in a pool and selling them almost immediately to investors around the world.  That was the chain of events that ultimately allowed there to be an enormous amount of credit, and Countrywide used that access to easy loan money to seduce people into buying houses they couldn’t afford.

Chrystia Freeland, who wrote for “Financial Times” insisted, that it wasn’t Countrywide alone, but it was part of this system, where the banks, as they did historically, no longer held the mortgage.  Therefore, the banks no longer had a direct financial incentive to care whether people were going to pay their mortgage back.

Number two on the “Times” list was former Republican Senator Phil Gramm, who was the chairman of the Senate Banking Committee.  He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street.  Furthermore, Gramm slipped the “Commodity Futures Modernization Act,” into an omnibus spending bill just as Congress headed for vacation.

In 2004, Bush’s Securities and Exchange Commission scrapped a 20-year-old rule that made banks keep a certain amount of cash on hand to cover investment losses.

The nonpartisan Wall Street Watch project revealed that deregulation was purchased by Wall Street executives, by paying politicians for unprecedented freedom from oversights of banks, security firms, private equity and hedge funds, insurance and real estate.  For 10 years, Wall Street lobbyists spent more than $5 billion to influence regulators.  In 2008, a total of 2,996 lobbyists spent $1.7 billion on direct campaign contributions.

The Dodd-Frank Act must continue to provide oversite.


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