by Tina Grazier
Last year I posted several stories that targeted government policies regulation of lending institutions and leftist government policy as the big culprits in the economic crash. The Obama administration, Barney Frank, et al, and left media have consistently placed the blame for our financial woes on Wall Street.
Well, well, well! A story in the Washington Times today suggest that I have been accurate about the source of the failure and that the left has been playing politics with the crisis to beat the band, the Republicans and what’s even uglier, the American people. Just how guilty was Wall Street in the financial crisis? Let’s get a report from those who have been investigating for fraud on Wall Street:
“Feds find little fraud at big Wall Street firms,” by Patrice Hill – Washington Times
While the American public and Capitol Hill lawmakers appear to blame wrongdoing on Wall Street as the primary cause of the global financial crisis, federal law enforcement agencies have had little success in finding and prosecuting instances of fraud at the nation’s major investment firms. ** Attorney General Eric H. Holder Jr.s testimony before the Financial Crisis Inquiry Commission last week, while boasting of thousands of cases against small-time defrauders running mortgage scams, was notable for the absence of a single example of successful prosecution of crimes by the big firms on Wall Street. ** The Justice Department last year lost the only case it has brought against Wall Street executives involving suspected fraud in connection with risky subprime mortgage securities. A U.S. District Court last year acquitted two Bear Stearns hedge fund managers whom the government accused of fraud.
The government’s stupid regulations created an atmosphere that encouraged cheating and fraud. You can’t tell lenders that they have to throw out the rule book and then expect them to be able to color within the lines. Over time the only thing left is the opportunity to make money. The government gave them permission, indeed compelled them, to go for it, wise practices be damned! So what have the federal investigations found:
While public outrage has largely targeted Wall Street, the government has consistently said that fraudulent operations were spread across the country and encompassed every sector related to housing and mortgage finance. ** “Mortgage fraud has swept through our economy,” Assistant Attorney General Lanny A. Breuer told the commission, and it has continued in the aftermath of the financial crash. New scams, he said, are taking advantage of people who are in default on their mortgages and in danger of losing their homes to foreclosure.
Regualtions must be clear and must be consistent with wise banking practics. Lending to people that cannot give evidence of ability to repay loans, have no down payment, no consistent means of support, and nothing of value to show they are a good risk should not be given loans. Lenders should not be forced to lend to them. That’s pretty clearcut and easy for anyone to understand. Laws on the books about full disclosure of terms should not be set aside as these idiot regulations forced lenders to do in order to make the loans.
Americans need to be educated about these things. Maybe that is the only way to stop the stupidity of politicans…especially those that will take advantage of a crisis for political power. Bottom line…Wall Street was not the big problem…government was and is.