Any rescue plan should also be designed to ensure that taxpayers are protected. It should welcome the participation of financial institutions, large and small. It should make certain that failed executives do not receive a windfall from your tax dollars.
Well. Bush warned us about Fannie Mae and Freddie Mac, who were the primary causes of the housing collapse which caused our financial problems. And since the taxpayers are on the hook for 1-5 TRILLION in their bad loans. I think they're taking advantage of us.
That is a rather idealistic and naive point. The power of the banks in most western nations but in particular the United States of America and Great britain is truly awesome and both governments tread on very thin ice when negotiating with these very clever and utterly ruthless crocodiles. In many ways the senior directors of the major banks and other financial institutions wield more power and have greater influence in decisions affecting the nation than the 'here today gone tomorrow' politicians.
Sure wasn't an elected politican, they've been bribed since time began. If you deal with The Bank of America remember you were forewarned, they're a RICO in motion.
Banks usually facilitated the questionable sub-prime loans only if they had a avenue to dump the 15 and 30 year mortgages somewhere else. They knew better to hold onto toxic mortgages as they got to see the holder of the loan and made a risk assessment. They couldn't deny people loans if they felt they were not able to pay back the loans, because of Community Reinvestment Act changes made by Bill Clinton. And the biggest buyer of sub-prime mortgages was Freddie and Fannie, two government sponsored organizations, who, immediately when the Democrats took over the Congress (2/3rds of the government) and during a real estate bubble no less, ordered the FHA to order the two organizations to increase their sup-prime exposure. It's all these houses people shouldn't have been allowed to get, or even speculate in, that is taking years to unwind. Bush created the real estate bubble on his watch to improve the economy and fight deflation, but it was Democrats who showed up later to screw the economy pooch by extending government loans to anyone who applied.
