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348 Comments
- doiveo, on 10/03/2008, -5/+207So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. Here's a partial list of those alleged to be at fault:
- The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
- Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
- Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
- Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
- The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
- Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
- Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
- Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
- The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
- An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
- Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.
...
If the problem is that complex the solution will be equally so. - FTWmovin2canada, on 10/03/2008, -4/+112FTA: "The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) is just political grandstanding."
- algaeturd, on 10/02/2008, -52/+133Jesus Christ, that was long and convoluted. So basically the facts are that it was a complicated mess that was caused by many, many factors over a long period of time?
HOLY *****! Stop the presses!
What a waste of time this thing was. I usually respect factcheck but this was a mess of an article spread out over 5 separate load pages. - inactive, on 10/03/2008, -6/+82This article > All the MSM. huffpo, dailykos, Free Republic, LGF articles I read about the whole mess.
Simple, vulgarized and neutral. The list of factors should be placarded in every newspaper out there, so that people stop pointing fingers at the past and start looking to the future.
Won't happen though. You need a population that is scared ***** when election day come. - AyaJulia, on 10/03/2008, -1/+49Eh, you can blame factcheck for the article's content, but not the multi-page factor. That much was newsweek's doing. Original (single page) article is here: http://www.factcheck.org/elections-2008/who_caused ...
- FulcrumVitesse, on 10/03/2008, -6/+50Yesss! Finally a multi-page article. I just love those!
- geneusutwerk, on 10/03/2008, -0/+42Why is this on Newsweek and not just the factcheck.org website?
http://www.factcheck.org/elections-2008/who_caused ... - TVarmy, on 10/03/2008, -2/+40I'm sorry you guys. I think I might have caused it. I was going to the bank a few months back, and I deposited a check in an ATM, but I realized I forgot to endorse it. The bank didn't catch the problem, and I think that's what caused Washington Mutual and Wachovia to go down.
- socalftw, on 10/03/2008, -3/+40To some, the solution is a complex package of ***** that costs $700 billion.
- Temo1, on 10/03/2008, -3/+39It was long, yes... but it's a complicated problem.
It was not convoluted, you should just read better. - EntropyFan, on 10/03/2008, -1/+34Sorry, this is an election year, and the American voter has no time for complex.
You'll need to take what you have and break it down to a 1 paragraph sound bite.
And you will need to place the blame on something specific and absolute.
Personally, I'd start by removing any facts you might have. It saves space. - inactive, on 10/03/2008, -2/+30FTA:"It's true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was "overblown." Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities "ill-advised.""
But the Republicans in control did not bring it to the floor until it was too late. Did they wait because they didn't have the votes and it would have been pointless? Or they didn't see it as a priority? - Bloodwine, on 10/03/2008, -2/+28That would be, "Who are the Baby Boomers?", Alex.
- hipnerd, on 10/03/2008, -6/+31Yeah, why can't Diggers set aside naked partisanship in the face of contradictory facts they way you did by blaming Barney Frank.
Oh wait. - scoot2006, on 10/03/2008, -0/+25You son of a bitch!
- nj10ii, on 10/03/2008, -0/+24Does the argument hold true then on the opposite side, that a single piece of legislation will correct the current problems?
That's what they are feeding the public, is also political grandstanding and at best a band aide. - inactive, on 10/03/2008, -21/+42This is Digg. Fact check can check all the facts they want but Diggers blame Bush and McCain. Prediction: This thread will be filled with comments that praise the Dems and slam the Reps. They don't mind that Barney Frank told investors that Freddie and Fannie were sound investments.
- inactive, on 10/03/2008, -3/+23You know what we can spew venom at the Feds all we want, at the end of the day the American people have to take responsibility for over-extending themselves. Which came first greedy lenders, or over-ambitious people wanting to live the 'American Dream'?... well I hate to break it to everyone... In a capitalist society not everyone is meant to own a home... Every Tom, Dick, and Jane... bought into the buy now pay later premise (when they knew they would never have the money to pay later)... and now who is paying for it.. the responsible people that didn't over-extend themselves, who are still paying their mortgage, and now an ass load of taxes for a generation of credit-hungry delusional Americans... Hopefully this imminent crash will knock some sense into people.
- RSMiller, on 10/03/2008, -4/+23Shun the non believers! SHUUUN!
- widman, on 10/03/2008, -0/+16From TFA:
* The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
* Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
* Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
* Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
* The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
* Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
* Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
* Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
* The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
* An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
* Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up. - duster805, on 10/03/2008, -0/+16Because it was long and didn't have a simple answer you are digging it down? People like you are why politics and are country are the way they are today. Sickening.
Best and most complete, non-biased article I've read so far. It does leave out the infusion of capital into the US after the end of the cold war (forgot where i read that) and the invention of the Credit Default Swap, but overall, awesome article.
here's the CDS article:
http://www.newsweek.com/id/161199 - wendelgee2, on 10/03/2008, -1/+16Finally. No more partisan bickering, just an honest stab at finding the truth.
- nastysquar3d, on 10/03/2008, -2/+16If I could vote you up 100 times I would.
I'm so sick of the finger pointing, we're all in this mess together as AMERICANS.
Partisan people and politics fail to grasp this concept. - tkstock, on 10/03/2008, -0/+14That's the way to take it like a stand-up kind of guy. We'll just bill you for the $1 trillion that was lost in the stockmarket. Where do you want the bill sent?
- sleze, on 10/03/2008, -8/+22Thank you for summarizing it. Some of these articles need an executive summary:
Summary: The problem was caused by everyone. See below for details. - fuse13, on 10/03/2008, -4/+18Hi Nitesmoke. I thought the article was pretty balanced, and I am a filthy lefty.
- inactive, on 10/03/2008, -1/+15Screw finding out who caused the economic crisis, lets find out how can we make money on the economic upturn.
- rondorondorondo, on 10/03/2008, -1/+15It is actually $850B now.
- hagfish70, on 10/03/2008, -4/+16For products of extensive MTV viewing like you, there is a summery on page 4. It doesn't take a genius to figure out that if one clicked forward a few times, one could easily find it. The article is long, so that readers who can actually read a page of words without getting distracted/bored and who desire more information and/or want deeper clarification, can have it.
- Temo1, on 10/03/2008, -4/+16Great article, it makes plenty of great points. Maybe now people will stop blindly denouncing deregulation without knowing specifically what they're talking about.
- NJank, on 10/03/2008, -1/+13Warren? is that you?
- mikestrawman, on 10/03/2008, -1/+12Good summary. It all flows from the top. The government and the federal reserve created this mess.
It is a disgrace that our Congress is so incompetent that they just gave these same idiots $700 billion of OUR money to try to fix it - BadseedJR, on 10/03/2008, -0/+11You bastard.
- Temo1, on 10/03/2008, -0/+11False. The first version passed only 54-44, however the second version (with compromises) passed 90-8.
Source: http://www.govtrack.us/congress/bill.xpd?bill=s106 ...
"May 6, 1999: This bill passed in the Senate by roll call vote. The totals were 54 Ayes, 44 Nays, 2 Present/Not Voting.
View Votes (Senate roll no. 105)
You are not watching the votes of any senators or representatives. To monitor votes, look up a Member of Congress.
Jul 20, 1999: This bill passed in the House of Representatives without objection. A record of each representative's position was not kept.
Nov 4, 1999: After passing both the Senate and House, a conference committee is created to work out differences between the Senate and House versions of the bill. A conference report resolving those differences passed in the Senate, paving the way for enactment of the bill, by roll call vote. The totals were 90 Ayes, 8 Nays, 1 Present/Not Voting.
View Votes (Senate roll no. 354)
You are not watching the votes of any senators or representatives. To monitor votes, look up a Member of Congress.
Nov 4, 1999: After passing both the Senate and House, a conference committee is created to work out differences between the Senate and House versions of the bill. A conference report resolving those differences passed in the House of Representatives, paving the way for enactment of the bill, by roll call vote. The totals were 362 Ayes, 57 Nays, 15 Present/Not Voting. - hcarlens, on 10/03/2008, -1/+12I think we all know who is behind this...
Crab People,
Crab People,
Taste like crab,
Talk like people - nemo001, on 10/03/2008, -1/+11There is lots of blame to go around. It is a big ***** sandwich and everyone responsible will have to take a bite.
- Andysan, on 10/03/2008, -5/+15Don't you love how insignificant factors show up in the list:
-Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
How about blaming the house painters who made more money painting larger houses?
The short list is:
1. There never should have been legislation to support free houses in the first place.
2. There never should have been pressure on lenders to lend money for free houses.
3. There never should have been pressure on bankers to package and sell the trash loans.
Who did all this? CONGRESS in all its wisdom. Their 10% approval rating has to come from the 10% of the population who got the free houses. Now make a list of the Congressmen who did this and forget all the other baloney. - SonnyW, on 10/03/2008, -4/+14Blame Canada?
- monkeyrun, on 10/03/2008, -6/+16I am not sure who caused it, but if the "700 Billion Bailout" doesn't fix it, then I know exactly who to blame.
- Temo1, on 10/03/2008, -1/+10The point they're making is that Real Estate agents have a monetary intrest in increasing home prices: The more the house sells for, the more they get in percentage comission. So if you're using a real estate broker to buy a house, you may not get the lowest possible price on your home.
- wendelgee2, on 10/03/2008, -4/+13There are no candidates who fit that description.
Please try again. - Hetman, on 10/03/2008, -0/+9Misleading title. It should be called who is not to blame for the economic crisis.
- inactive, on 10/03/2008, -0/+9Down markets are the best time to make cash over the long haul. Buy now and buy often. There are so many undervalued companies out there at the moment it makes your head spin.
- sangjmoon, on 10/03/2008, -4/+13The savings and loans debacle, the sub-prime loan mess, and the current collapse of brokerage firms have their root in one thing - the attempt to mask investment risk. By allowing investment companies to mask the riskiness of their investments either by repackaging bad loans or relying on the backing of the government have only replaced short term risks and smaller downturns with bigger ones that come less frequently but are too big for even the largest companies to handle all at once. It is time to remove the abstraction and let the riskiness of investments become naked for all to see without any significant assurance of the government bailing them out. Let each bad loan and investment fail and hurt those who made them directly. Forget all this layer of bureaucracy that tries to hide or push back the bad news. If you are looking for the ones to blame for setting us up for failure, just look at congress including Obama, Biden and McCain. Every time they "do something", they introduced more government when there is actually a need for less.
- odigity, on 10/03/2008, -2/+11The problem is incredibly complex. But the solution is relatively simple. Return to the Constitution. Strictly.
- xenuxenuts, on 10/03/2008, -3/+11actually, from what I've heard, that is not touted as a solution. It is to prevent credit from drying up. If credit drys up, it will cost the government way more than $700 billion.
- randumbusername, on 10/03/2008, -1/+9the solution from congress: re-inflate the bubble, push the problems off to the future.
- ObamaWins08, on 10/03/2008, -8/+16Sounds like a good list. The only one I really disagree with are real estate agents. I mean, they sold homes. The seller put a price and a willing buyer agreed and paid for it.
It's like saying that it's the McDonald's cashier's fault that I am fat. - Temo1, on 10/03/2008, -1/+9They did mention that (note on mark-to-market), read more closely.
- KnutTheBear, on 10/03/2008, -0/+7New York Times article about Fanny Mae--1999
http://query.nytimes.com/gst/fullpage.html?res=9C0 ... -
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