Thursday, March 24, 2016

Enough with the Bernie/Hillary Jabs at Wall Street

Throughout their political campaigns, both Hillary Clinton and Bernie Sanders have laid blame for the 2008 financial crisis on Wall Street; as if the six 'too-big-to-fail' banks that had to be bailed out were somehow representative of thousands of companies who have allowed their stocks to be publicly traded.

Hillary says she's not going to allow "Wall Street to bring down Main Street" ever again. Bernie wants to tax Wall Street; breakup the big banks; and reinstate Glass-Steagall which prevented banks from investment activities on Wall Street.

First of all, both these people act as if nothing was done following the financial crisis.  They seem to forget that, in 2010, both Houses of Congress -- both controlled by Democrats -- and Barack Obama passed the Dodd–Frank Wall Street Reform and Consumer Protection Act into law to, supposedly, stop the 2008 crisis from ever happening again.  So, why is this an issue all over, again?

Also understand, Wall Street IS Main Street. According to Gallup polling, 55% of those surveyed said they were invested in the stock market.  While down from 62% before the financial crisis, that 55% is climbing back from a low of 52% in 2013.  So, I suppose that 55% of this country's households aren't "Main Street" enough for Hillary Clinton.  Or, for Bernie, the lie that only millionaires and billionaires -- of which there are only a little over 10 million in a country of 320 million -- only benefit from Wall Street.

Lastly, the financial crisis that followed the housing bubble was primarily a result of two things.  

  • The first was the expanded use and enforcement of the Jimmy Carter passed law known as the Community Reinvestment Act (CRA) by Bill Clinton while he was President. Basically, that Democrat-written law forced banks to lower their lending requirements and increase the number of mortgages for otherwise non-eligible, low-income borrowers.  Thus, banks did get involved with forms of predatory lending in order to comply with the law. In hearings following the financial crisis, the CEO of Bank America said that, while CRA loans only made up 7% of that bank's mortgage portfolio, they resulted in 29% of their losses during the housing meltdown.  Another CEO of a mid-sized bank said that about 20% of all his CRA loans would be in arrears in the first year and 7% would fall into foreclosure.  Democrats have always tried to shift blame away from the CRA because they were responsible for it.  Thus, Wall Street and big banks have become their diversionary targets for those who are uniformed.
  • In addition, Glass-Steagall, which Bernie Sanders wants to reinstate, was repealed by none other than Bill Clinton when he signed the Gramm, Leach, Bliley Act which allowed banks to participate in investment banking in the stock market.
The reality is that Bernie and Hillary, as Democrats, should be looking in the mirror when they talk about blaming someone for the financial crisis.   And, by the way.  The best analysis of the financial meltdown is given by two writers from the liberal New York Times titled "Reckless Endangerment".  See below for an excellent video summation of that book by Rush Limbaugh.


Bernie Sanders on Financial Regulation:

Community Reinvestment Act: 

Dodd–Frank Wall Street Reform and Consumer Protection Act:

Little Change in Percentage of Americans Who Own Stocks:

More millionaires than ever are living in the US:

Gramm–Leach–Bliley Act - Wikipedia, the free encyclopedia:

Video: Subprime Disaster - President Clinton Takes Credit for Community Reinvestment Act Loans:

Video:  Rush Limbaugh on 'Reckless Endangerment':

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