New Movie "American Casino" (NOT playing at a theater near YOU) - the easiest to understand explanation of the financial crisis. (not the subsequent bailouts, but the original cause of the financial crisis).
BD: In a nutshell, because of deregulation (Phil Gramm's legislation), mortgage risk was allowed to be spread outside of the mortgage lending institutions. They were off the "risk hook". So, why wouldn't they push as many mortgages as they could, knowing it wasn't THEIR risk? They'd sell off the mortgages to other entities, marking them as "safe investments", when they weren't. They spread to the whole world, now that the floodgates were opened. More mortgages = more profits = no risk for the lenders (with Gramm's legislation). Phil Gramm snuck this legislation onto an 11,000-page bill in the "bottom of the 9th", December 2000, as presidents were changing and congress was about to go out on recess. Gramm's rider undid all the checks and balances and regulations put into place after the Great Depression, so a financial crisis wouldn't happen again (Glass-Steagall Act). Alan Greenspan was the enabler for all this to happen, because it fit in with his vision of a no regulation free market. Greenspan was "shocked" at how the REAL (not "theoretical") free market worked, he said. Where is Phil Gramm now?
MICHAEL GREENBERGER: To understand why this is like a gambling casino, you have to understand what’s at stake here. On a December evening, December 15th, 2000, around 7:00, Phil Gramm, Republican senator of Texas, then chair of the Senate Finance Committee, walked to the floor of the Senate and introduced a 262-page bill as a rider to the 11,000-page appropriation bill, which excluded from regulation the financial instruments that are probably most at the heart of the present meltdown.
He not excluded them from all federal regulation, but he excluded them from state regulation as well, which is important because these instruments could be viewed to be gambling instruments, where you’re betting on whether people will or will not pay off their loans. And he announced at the time that this measure would be a boon to the American economy and be a boon to Wall Street, because they would be freed of any supervision in this regard. And that lack of supervision freed Wall Street to essentially shoot itself in both feet.
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REP. HENRY WAXMAN: Dr. Greenspan, you had an ideology, you had a belief, that free, competitive—and this is your statement: “I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We’ve tried regulation. None meaningfully worked.” That was your quote.
You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?
ALAN GREENSPAN: Well, remember that what an ideology is is a conceptual framework with the way people deal with reality. Everyone has one. You have to. To exist, you need an ideology. The question is whether it is accurate or not. And what I’m saying to you is, yes, I’ve found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.
REP. HENRY WAXMAN: You found a flaw in the reality—
ALAN GREENSPAN: Flaw in the model that I perceived as the critical functioning structure that defines how the world works, so to speak.
REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right. It was not working.
ALAN GREENSPAN: That it had a—precisely. No, that’s precisely the reason I was shocked, because I’ve been going for forty years or more with very considerable evidence that it was working exceptionally well.
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In GREEN below: the entire reason for the financial crisis:
MICHAEL GREENBERGER: Alan Greenspan was the foremost proponent of these derivative products, credit derivatives, which are now at the heart of the meltdown, of them not being subject to regulation. And his theory was as follows, that he believed these instruments afforded banks the ability to move risk out to the economy—in other words, to exchange their risk of making mortgages and having to worry whether people would pay the mortgages and creating financial products that would invite the rest of the financial world to participate in that risk. His theory was, well, this isn’t making matters worse; it’s making matters better, because banks, when they make all these mortgages, won’t be subject to forfeitures.
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“American Casino”–Doc Investigates Roots of the Subprime Mortgage Meltdown and Tells the Stories of Its Victims
The broken US health care system has been driving American retirees who are less worried about finding jobs, and more concerned about staying healthy to Mexico where they can enroll in “a health care plan with no limits, no deductibles, free medicines, tests, X-rays, eyeglasses, even dental work — all for a flat fee of $250 or less a year.”
American Retirees Move To Mexico For Health Care
Click on the above logo to enter "GrassleyWatch": Tracking Grassley’s Efforts To Obstruct Health Care Reform
Mark Steyn is subbing for Rush Limbaugh this week on his radio show. The Muslim-hating homophobe Mark Steyn, with his pompous English accent, loves to attack Ted Kennedy during the week of his burial and tell Americans to be against national health care and American kids not to listen to Obama's speech....irony of ironies, Mark Steyn has National Health Care because he's a Canadian citizen!
Pompous Canadian fill-in Steyn's homophobic joking about gay Americans:
"I'm a rich bloody Canadian asshole, you Americans are stupid! I have free health care! You're the only country without it! Blah blah blah blah blah YOU are an IDIOT!!!"
