Thread: Where Do We Draw The Line?

Originally Posted by joebehar

Interesting...although you're mostly right, the question that comes up is how do we keep companies that are less than ethical from ripping people off?

Its precisely the lack of regulation that got your fine country into that mortgage debacle that started this downward spiral,

I'm all for free markets, but free does not mean you can cheat and steal. if a private company willfully cheats and lies, they need to be held accountable. If you or I misrepresented ourselves at a bank and managed to get a million dollar loan and then refused to pay it back I think the full weight of the law would be upon us. Not one single person or company has been charged, let alone convicted in the sub prime mortgage fiasco.

I believe government should protect its citizens...all of them, not just the ones that donate millions to re election campaigns.

Yes, things like Love Canal are blights on our Citizens and the people that did that deserve jail and fines.

I must disagree. The responsibility for the present financial situation sits squarely on the Democrats. Follow this thread, it goes all the way back to the Carter Administration. A law called the Community Reinvestment Act was passed. It addressed the perceived problem of mortgage loans not being made to poor people that couldn't afford houses. It put pressure on banks to make loans. The bank regulators were looking for something called "redlining". The denial of loans to poor people. Never mind that these people just couldn't afford the loans.

Now comes Clinton. He put teeth in the law and Banks were put under even more pressure. Banks mergers and a lot of other business was denied unless the banks could show that they were making high risk loans to poor people. To be able to comply the banks started doing outrageous things like the "liars loan" where false information was put on the applications, and Adjustable Rate Mortgages so the loans could be paid for a few years. The housing market was booming. The banks made money and sold the loans to Fanny Mae because they knew they were bad. Federal regulators looked the other way because this was government policy after all. Another company, I forget the name, insured the loans and packaged them up and sold bonds on the worthless loans calling them derivatives. Fanny Mae was making a killing. Then the market started to fall. Defaults rose because values declined and the houses could not be sold for what was on the books. The insurance company couldn't cover the losses and went under. Suddenly the derivatives were worthless. Iceland owned a boatload of them and their economy collapsed. The problem spread to Europe.

The Bush Administration spotted the problem in 2002 and tried to do something, but was blocked in Congress. The managers of Fanny Mae quit before the fall, pocketed their millions and now work for Obama.

These people should be in jail, but because the government caused the problem they don't want the spotlight on the real causes.

Banks did what they had to and didn't squawk because they were making money. The government that was supposed to be protecting us caused the problem. What is their solution, more regulation.