Do you think this Republican Administration under Bush is responsible for this recess

Do you think this Republican Administration under Bush is responsible for this recession one of the greatest ever to hit America?

 

I don't think they are completely responsible, but they most certainly share some of the blame. You can't realistically expect to spend $10 billion dollars a month on a foreign country without having an impact on the domestic economy.

 

Yes. But now I think it's time to head back to the classroom.

(sorry, thread title, couldn't resist).

 

It's not one political party, one person, or one group in general at fault. It's all a big case of greed, from members of congress, bank executives, wall street speculators, oil companies, to the person who bought way more than could afford.

 

As Paulson has said, it's an outdated and broken regulatory system.

 

I don't see where a single person in the Bush administration is tied to the current financial mess. You can blame a lot of individuals. The list is very long. They need to prosecute some of them and lock them up. All Bush was doing was letting a free market exist.

Part of the blame for the mortgage crisis goes back to the Clinton administration when Janet Reno threatened to prosecute several banks for redlining certain districts. It goes back further when Jimmy Carter passed the Community Reinvestment Act, which forced banks to give high risk home loans to a percentage of people in a neighborhood. Redlining was a legitimate practice of identifying the high risk areas where people did not pay their mortgages, maintain their properties or produced a high foreclosure rate. The banks were either refusing to write loans or were charging (appropriately) higher interest rates due to the higher risk. These are very high risk areas that any business would naturally try to avoid. Foreclosures are very expensive for banks to deal with. Clinton and Reno saw it as discrimination.

You might also want to take a look at the relationship between Fannie Mae and Freddie Mac, and Barney Frank, Barak Obama and Chris Dodd. They were each taking large political donations from Fannie Mae and Freddie Mac. Chris Dodd is the Senate Banking Committee Chairman and Barney Frank is Chairman of the Financial Services Committee. Was it appropriate or ethical for them to take these political dominations when they were in charge of regulating these agencies? Probably not.

The CEOs from both Fannie Mae and Freddie Mac were recently dumped and are now economic advisors to Barak Obama. Go figure. I give up.

In the area where I live, at the peak of the market in 2005 more than 50% of the homes were being bought by investors and speculators who put very little down on the homes. A large percentage of those investors are responsible for walking away from homes and allowing them to go into foreclosure. When they talk about homeowners getting hit with the mortgage mess, they need to subtract the number of speculators that contributed heavily to the mess. As far as the homeowners go, I do not understand which art of Adjustable Rate Mortgage they failed to understand included an adjustable rate. I do not want to bail out any of these people.

Like I said, the list is long and this mess was building long before Bush took office. It just needed the right circumstances to trigger it.

 

Unless Bush was flipping condos in Florida with everyone and their mother then no he isn't to blame for this mess and its not only a problem isolated to the united states, the prices of homes in europe are also starting to fall, which is going to lead to the same problems that we have.

 

This recession has essentially exploded out of the bad mortgage debt crisis. It has been made more severe by an explosion in commodity prices (primarily oil), and had probably been accelerated by a overwhelming shrinkage in the value of the dollar and US government debt which exploded this decade.

The primary cause though is the mortgage debt explosion and subsequent implosion when rapid home price increases flattened.

The major problem has been the explosion of subprime mortgage debt. By mid 2007, according to the Federal Reserve Subprime mortgages represented about 14% of outstanding first mortgages. Additional lower quality mortgages represented 8-10% of first mortgages http://www.federalreserve.gov/newsevents/speech/bernanke20070517a.htm.

The explosion of foreclosures came right out of the subprime market.

While subprimes came into existance during the 1980's there usage took off starting in 1995 and it continued to spiral into the mid 2000's. Each year saw progressively more sub primes being issued.

During both the 1990's and 2000's there were warnings about this phenomena. Nothing was done. As bad as the warnings were in the 1990's they were far more ominous during this decade as the volume of these high risk loans exploded.

More specifically the explosion of securitizing these loans took off during this decade. It moved the problem of ownership of the loans from the originating banks to world wide exposure.

Coincidentally, during the early 2000's the Bush administration removed oversight on many banks and financial institutions from states to a fed office. The office didn't do oversight. The loans exploded.

I believe there is some clear culpability laid on the Bush administration. It simply turned its eye away from a growing debt problem in the private markets. It looked the other way and ignored it.

During this decade the Administration seemed to ignore debt accumulation on every level. It ignored growing debt within the Federal Government. (Vice President Cheney had a famous quote saying "debt doesn't matter). Its measuring measuring function saw the growth in debt and didn't act. (Admittedly that happened during the end of the Clinton administrtion with regard to the sub prime problem--but those measurements went totally out of whack during the Bush administration). Its oversight functions did nothing.

I'd put a level of blame on the administration. Its not 100% but it is certainly there.

 

It looks like the "Angle-Saxon" economic model is falling apart...

The "Anglo-Saxon" system is what our European continental cousins called the economic model of Britain and the US.

There were two repeated mantras of Gordon Brown when he was Chancellor of the Exchequer - one, the days of boom and bust are gone (he repeatedly this dozens of times), and two, look how better our economy is doing than other European countries...

It's clear now that any growth advantage came about because the financial institutions - intentionally under-regulated - were allowed to take greater risks, but which also meant greater opportunities for crashing

Over in France, they won't feel the pain nowhere as near as badly we will in Britain. Their financial markets are very tightly managed, and their banks and similar institutions have spread their portfolio right across the sector rather than just in property.

It's very difficult to get a mortgage in France - certainly a lot more so than it is in Britain

They simply don't have the love affair with debt that we developed over here in the UK

So is the Bush administration to blame? Of course they have to take some of the blame, I mean they have been the government for the past eight years

Over here in Britain the Labour party were always taking the credit for economic growth, and now its reversing, they blame everybody else - international credit problems, high oil prices etc... well you can't have it both ways, can you

 

it's your fault for letting him get elected. your fault you let the federal reserve remain un-nationalized. your fault for ignoring Paul's warnings. your tax dollars fund this all. you. you. you.

nobody but ourselves is responsible, because for some reason we don't have half the balls our forefathers had. either we need to put hair on our chest or theirs was dragging on the ground.

 

Bush is merely a symptom of the 80 year economic and social cycles that any civilization passes through. Every generation is like a season...every season is 15-25 years depending on how the winds turn.

We pretty much spent all of the fall out getting drunk with the grasshopper. Don't feel too bad - History says this is par for the course.

Winter is coming, the credit markets have only seen an early frost.

 

No that's not true

Bush and the Al Qaeda are to blame for everything.

 

i like to believe no one absolute public figure is solely responsible. this has been planned for yearsssss. bush is just a puppet, so is every other president.

even the people aren't all that responsible. in any case, finger pointing won't get us any further, we need to learn from past mistakes and do this damn thing right this time.

 

@ncz_nate, there is a good reason as to why the Federal Reserve is independent and "un-nationalized" as you call it. The Fed Chairman is independent and reports to Congress, but doesn't take direction from anyone. He is appointed by a sitting President, but is independent in order to keep politicians from screwing up the economy by manipulating the money supply.

Greenspan was originally appointed by Reagan and then by Clinton. For many years Greenspan did a good job of keeping inflation low by limiting the money supply. He was instrumental in the relatively stable economy of the 1990s.

If we were to nationalize the Federal Reserve, it would come under control of the gaggle of idiots we call Congress. That is indeed a very scary thought.

I heard a statement today that puts it into perspective. "Allowing Congress to control your money is like letting a hungry dog watch over your food."

 

So instead of that we have absolutely no oversight of what the hell is going on.. well, that's pretty smart! AND Constitutional!

 

Fixed that for you. Greenspan kept the money supply tight, that's a good joke!

I want Congress to have responsibility for the money - not because I think they'd be particularly good at it, not even just because the constitution says so, but mostly because that would take up time they use to spend our money on other things.

 

There are a lot of factors effecting the financial system right now, sort of like a perfect storm. Government input/factor is very little. Your starting to see the same problems in Europe with falling home prices so its a global issue not a American one.

 

The Fed (Greenspan) has nothing to do with the debt that has accumulated. The Fed controls the money supply (they do not pay the bills) and after the disastrous stagflation 1970s, the primary goal was to contain inflation, which Greenspan did very well. The WORST group in the world to control our money supply is Congress. They are responsible for spending and budgets, and we all know how irresponsible they have been in those areas.

Congress, especially the current Congress, has proven that they are not particularly good at anything. They act in the best interest of their parties and not in the best interest of the country or the people. They appear to be scrambling to fix the problem because the regulatory commissions are controlled by Democrats and they are trying to cover their butts.

Here is the problem. When we have a Republican president and a Democrat Congress, they will spend like drunken sailors and blame it on the current administration. They did that under Reagan and they have been doing that under George W. Both presidents allowed them to do this because spending keeps the economy moving. It helped to resolve the major economic problems in the early 1980s and delayed the recession we were heading into when Bush took office and the effects of 9/11 afterward. The problem is that the bill for spending needs to be paid at some time.

Normally, when Republicans control Congress, growth in spending is slowed. You can blame the former Republican Congress for betraying the people and their reputation because spending was not curtailed and they spent money like a bunch of Democrats.

By the way, the Federal Reserve was created by Congress and Wilson (a Democrat) in 1913, which makes it Constitutional. They passed responsibility to the Fed. The Fed chairman reports to Congress, but is not controlled by Congress. In 1913 they had enough wisdom to know that they themselves could not be trusted, or they just wanted to make sure that someone else got blamed for the problems. The latter is more likely than the former.

Absolutely. Everything with economics is cyclical. You can influence the cycle, but no one has been able to eliminate it. There are so many constantly moving factors that it is impossible to monitor them all and predict or prevent the consequences.

 

Sorry, but this is such a crock. Under Reagan, it was his budget that brought the nation to a trebling in its deficit, and McCain's budget is not far removed from Obama's intended budget. At some point, the propaganda will have to stop, and folks will have to realize the myth of Republican fiscal conservatism and Democratic fiscal wantonness is precisely that, a myth. They spend on different things, but they still spend.