Various conservative windbags have been blaming the current financial crisis on damn hippie legislation that forced honest, hard-working white banks to give money to lazy black people. But now the New York Times reports that it was a banker-friendly Securities and Exchange Commission that gave the big Wall Street firms the rope they needed to hang themselves—at their own request, naturally.
Back in 2004 the banks told the SEC that the rules requiring them to hold large reserves were holding them back. The more you lend, the more you make, right? The SEC did set up a committee to monitor the banks, but, you know. They’re big boys, right? They know what they’re doing. That’s why they get the big bucks.
There’s little doubt that Freddie Mac and Fannie Mae bought off the Democrats, and not a few Republicans, in 2005, with promises to “do more” for low-income home owners. Well, with promises and millions in campaign contributions, lobbying fees, and donations to community action groups, charities, and anyone else who had his hand out. And it’s possible that tighter regulation would have prevented FM2 from leveraging their cash so aggressively—although in doing so they were just doing what everyone else was doing—because, while you can run your company into the ground by following the conventional wisdom, you’ll almost never lose your job. Besides, they were making millions. You got a problem with that?
But the Times article takes an awfully big whack at the Bush Administration’s “no hands” approach to regulating Wall Street. I suspect that Obama n’ Joe are going to quoting this article—if not reading it verbatim—a lot in the next month.*
*No doubt this is unfair to poor Sen. McCain, since he started attacking the SEC first. But they’re all Republicans, aren’t they?
