There is a lesson that can be learned from the 1930s, Taft never accomplished his goal of dismantling the New Deal. If you look at banks they will say member of FDIC, the Federal Housing Authority still exists and retirees still draw Social Security. Lets fast forward by quite a bit. In 2000s investors started investing into the housing market, back then if you had bad or poor credit. They bought mortgage back securities ( basically a collection of mortgages) However these investors needed more mortgages, so banks lowered their standards and created subprime mortgages and that is where things got a little shady. Mortgage companies offered mortgages started using predatory lending, making payments people can afford at first. then it blew to payments way out of their budget. The Interest was adjustable not fixed so they could basically set the interest rate on whatever the heck they wanted. This was a problem because their house was what was called " under water" , which means their house was worth 300,000 but their mortgage was 800,000. I am just making up numbers here but you get the general idea. Mortgage brokers got big bonuses for lending out more money, so they made more loans but as time went on things got a little dicy. So at first the subprime lenders thought that if someone defaulted on their house they could just resell it right. Wrong, home prices fell supply was up, but no one was buying houses. By 2007 financial institutions stop investing, and subprime lenders got stuck with bad loans that led to some declaring bankruptcy. There was something even worse, AIG sold insurance policies called credit default swaps in case something went wrong. . Credit Default Swaps had grown to roughly $60 trillion in global business.Its good to have insurance right Wrong , CDS are not regulated by the federal government. Most banks were buying and selling CDSs as time went on they were selling and paying out CDS. AIG only sold CDS, so when people started defaulting on their mortgages guess who had to pay out insurance money. However nobody was paying them. The difference between Insuring by CDS vs lets say insuring your home or car. For example, if someone t-boned your car and your insurance company had to pay out they could raise your premiums. plus their other customers are still paying premiums. Credit Default Swaps written by AIG covered $440 billion in bonds, do you think AIG had enough money to cover those.....Nope. This caused Banks to go bankrupt such as Lehman Brothers. That being said AIG knowingly sold insurance policies they know they could not pay, mortgage companies over charged home owners way out of their budget. this credit crisis caused the credit market to freeze and panic ensued. The stock market crashed, america was in a recession. So what did the government do. They passed TARP, the troubled asset relief program, or what most people called the bank bailout. The Federal Reserve gave a lot of money to save AIG and General Motors. They also conducted stress tests to see what banks were strong and what banks needed help. Newly elected President Obama signed a stimulus bill to pump more money into the economy. The most important thing it done was establish the Consumer Financial Protection Bureau, which by the way just nailed Wells Fargo for creating unauthorized accounts and credit cards to meet their quota. they were fined over 100 Million Dollars and over 5,000 employees were fired. President Obama's response to the recession was similar to FDR’s, creating a government agency for consumer protection, signing reform to our much needed healthcare system. Like Social Security which we pay into The Affordable Care Act will help people and get people covered. This time Robert Taft is not around and his brigade of Know Nothings to stop us. Wait he is Robert Taft is back only his name is Ted Cruz and he will stop it nothing to stall or abolish any progress we have made, including shutting down the us government. Conservative Governors like John Bricker and Scott Walker put party above america. Businessman Wendell Willkie and Donald Trump only put their careers in the forefront. They even tried to run their own north east moderate with a mid western conservative. Thomas Dewey and John Bricker Ticket is like a mirror image Mitt Romney and Paul Ryan. Programs like the FDIC protected a lot of money from losing money. I think 20 years from now every bank will say monitored by CFPB and they will know that their going to be a safe bank. When President Obama saved the auto industry he saved thousands of jobs. Free Markets are good but they are flawed and they should not be allowed to police themselves. RECOVERY COMES FROM PROGRESS
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