That’s Right Nate

Thoughts from a right thinker.

How Democrats Caused The Economic Collapse

with 15 comments

A lot of the current economic crisis is being blamed on George Bush and Republicans like John McCain.  However, nothing is further from the truth.  In fact, the credit crisis was caused by Bill Clinton and the Democrats back in 1994.    It was then that Bill Clinton signed a bill to promote low income home ownership.   I am not really sure how the Republican majorities in congress let this bill get through.

Over the next 14 years, the Republicans ascended into power and simply forgot about the bill.  Even when they controlled both houses of Congress and the Presidency they had either important issues to take care of.  When the economic crisis finally hit the Republican Senators were like “Oh no they di’nt.  I thought you fixed that sh**.”  And the Republicans in the House were like, “No dog.  I thought you did.” And then they were both like “Aw sh**”.

The way that this situation caused the economic crisis is pretty simple.  Say a poor inner city couple bought a house when they had no business doing so.  Let’s say the house cost $80,000 and they put up $5,000 up front.  As a crack whore the woman had a fairly steady income.  However, her husband was finding the carjacking market frustrating.  After a year or so, they stop paying the mortgage even though they owe $72,000 on the loan.

Unfortunately, the property value has dropped and the house is now only worth $70,000.  The bank reposesses the house, but they’re losing money on the deal.  It is easy to see how financial institutions could lose $100,000,000,000 a piece on mortgages like this.  The sad thing is banks are just too trusting.  Too often they put the public good above making money and the shrewd hustlers of the inner city will always take advantage of it.

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Written by thatsrightnate

October 10, 2008 at 6:41 pm

15 Responses

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  1. Uh, Nate, I think you meant “crack whore.”

    steve

    October 10, 2008 at 6:44 pm

  2. Thank you. My online translator is terrible with urban.

    thatsrightnate

    October 10, 2008 at 7:51 pm

  3. Really, it IS outrageous how people try to take advantage of the banks’ good will. I think we should all cheap in and give the banks some money for all they have done for us. I mean, more money than we’ve been giving them. Capitalism rocks!

    Lola

    October 11, 2008 at 8:49 am

  4. Exactly what I said on the Catherine Harris page! How dumb can people be???

    Melanie

    October 11, 2008 at 1:54 pm

  5. You are an ill-informed racist. You actually think black home owners are to blame for our crisis? You really don’t think the greed of the overwhelmingly white wall street bankers had something to do with it? I think all of us share some blame — we are a culture addicted to credit, we don’t save and too often we don’t spend wisely. I find nothing in your blog that illuminates any sort of civil discussion of our problems as a nation and as I said, your racism is quite transparent. Thank God, I don’t ever have to visit this site again.

    Mary

    October 11, 2008 at 2:38 pm

  6. Thank you. I hope you’ll visit here often.

    thatsrightnate

    October 11, 2008 at 3:18 pm

  7. ” As a crack whore the woman had a fairly steady income. However, her husband was finding the carjacking market frustrating.”

    And your inserted photograph that contains african americans. What are you implying? You have to be the most ignorant and thoughtless person who has put together one of these republican dick riding blogs. The mortgage crisis wasn’t caused by minorities, get your facts straight. It was caused by greedy lenders who wanted a piece of the sub-prime market. These greed motivated lenders granted unsustainable loans and sold the debt to more secure financial institutions. They became rich from the sold debt. And, by the way I hope a Black dude fucks your daughter. If you don’t have one maybe you will in the future and she’ll love to smoke the black pole.

    Insecure small penis racist.

    If I speak against the government does that mean I'm a Terrorist?

    October 11, 2008 at 9:34 pm

  8. The reason people were allowed to take out mortgages they couldn’t afford is simple: Banks lended money to people not based on their abilty to repay but, instead, on the bank’s ability to package and sell securities compiled from these loans. It is disingenuous to suggest this whole mess was caused by Clinton trying to let low income people own their own home.

    BigPoppa

    October 12, 2008 at 2:14 am

  9. Big Poppa,

    While I condemn any racist subtext in this post, it is a fact that Clinton, with the backing of A.G. Reno, made lending rules on banks more oppressive. So while Clinton perhaps was not the “cause,” his actions certainly brought us to this point.

    tsfiles

    October 12, 2008 at 5:08 am

  10. tsfiles–you are 100% right. I did not intend any racist subtext. I think that impression comes from the unfortunate juxtaposition of the picture of a young black couple with my hypothetical example of how the banks lost money. I in no way meant to imply that black people were crack whores. Clinton’s policies brought us to this point and yes its true that the Republicans controlled the White House and congress for much of the time since then, I’m sure they had more important things to worry about than overturning it.

    thatsrightnate

    October 12, 2008 at 12:20 pm

  11. Nate… C’mon, you “did not intend any racist subtext” when you did everything you could in the original article to *scream* racist stereotyping? At least have the guts to stick by what you wrote and what you obviously meant and not try to waffle on it later. I mean, if you had been kidding it would have worked as a joke, but since you are serious it’s just exactly what it appears to be. As for your analysis of what caused the financial collapse, it is so far off from what actually happened, which was white yuppies buying overpriced McMansions for $700,000 to $1.5 million that they couldn’t afford the payments on when the interest rates on their adjustable mortgages went up). And I should know, I’m a white yuppie and home builder. I built and sold some of those over-priced houses to those idiots and the numbskull bankers who gave them the loans and laughed all the way home. Clinton’s policy? Dude, the Republicans controlled the Congress for the last 6 years that Clinton was in office! Then they controlled it for the next 6 years after George W. was in office and the situation just kept getting worse while he, as usual, did nothing. Until 2006, we’ve had 12 STRAIGHT YEARS of Republicans running the government — and that’s the exact same time-frame when all the abuses leading up to this financial crisis were done. The last two years has just been reaping what was sown in the previous 12 — or do you not let little things like actual facts get in the way of your logic?

    JRS

    October 18, 2008 at 4:40 pm

  12. “And I should know, I’m a white yuppie and home builder. I built and sold some of those over-priced houses to those idiots and the numbskull bankers who gave them the loans and laughed all the way home.”

    So IRS what you are saying is you helped cause this mess? Apparently you are one of those greedy liberal Democrats who pilaged home buyers. Is that correct? Kind of like calling the pot black. Its easy for your hypocritical a** to blame Republicans now.

    As for some of you others, I did not see any reference to skin color in his article. There are also white scum out there!!! or did that cross your mind? Just because there are two African Americans pictured does not mean he is a racist. To me that picture looks like a happy middle class couple, probably watching their children play. I don’t see a crack whore and her looser hubby.

    Yes, the Clinton Admin & Democrats prior to the Republican Revolution passed the legislation making it much, much easier for the low income to purchase homes.

    I’m all for home ownership, but if you can’t pay the mortgage, you probably shouldn’t sign the line. Working at some low paying dead end job does not automatically grant you the right to buy a home. Like everything, you have to be able to pay for it.

    You want a home? Get a better job, work your way to financial security, then take the house plunge.

    You Democrats are really naive, NOBODY has the RIGHT to entitlements or special treatment. Life is hard and you have to work for everything you get.

    Jeff

    February 9, 2009 at 10:12 pm

  13. Thanks for the defense Jeff. You’re coming a little late, but better now than never. As I’ve been telling anybody who will listen some of my best friends are black and they will tell you I’m a great boss.

    thatsrightnate

    February 9, 2009 at 10:16 pm

  14. The cause for our economic recession has fault in both political parties, as the following legislation weakened the protective umbrella for the American taxpayer from the 1929 Depression. Every American is paying a price for the influence of big business ans short term greed, that drove our country to this situation, everything else is just propaganda and political deception.

    * 1976 – Hart-Scott-Rodino Antitrust Improvements Act PL 94-435
    * 1977 – Emergency Natural Gas Act PL 95-2
    * 1978 – Airline Deregulation Act PL 95-50
    * 1978 – National Gas Policy Act PL 95-621
    * 1980 – Depository Institutions Deregulation and Monetary Control Act PL 96-221
    * 1980 – Motor Carrier Act PL 96-296
    * 1980 – Regulatory Flexibility Act PL 96-354
    * 1980 – Staggers Rail Act PL 96-448
    * 1982 – Garn – St Germain Depository Institutions Act PL 97-320
    * 1982 – Bus Regulatory Reform Act PL 97-261
    * 1989 – Natural Gas Wellhead Decontrol Act PL 101-60
    * 1992 – National Energy Policy Act PL 102-486
    * 1996 – Telecommunications Act PL 104-104
    * 1999 – Gramm-Leach-Bliley Act PL 106-102

    The following are facts, not rhetoric or propeganda, as this statement states:

    In October 1982, President Ronald Reagan signed into Law the Garn-St. Germain Depository Institutions Act, which began the process of Banking deregulation that helped contribute to the savings and loan crises of the late 80’s/early 90’s, and the financial crises of 2007-2010. President Reagan stated at the signing, “all in all, I think we hit the jackpot”.

    In November 1999, President Bill Clinton signed into Law the Gramm-Leach-Bliley Act, which repealed part of the Glass-Steagall Act of 1933. This repeal has been criticized for reducing the separation between commercial banks (which traditionally had a conservative culture) and investment banks (which had a more risk-taking culture).

    In 2004, the Securities and Exchange Commission relaxed the net capital rule, which enabled investment banks to substantially increase the level of debt they were taking on, fueling the growth in mortgage-backed securities supporting subprime mortgages. The SEC has conceded that self-regulation of investment banks contributed to the crisis.

    Financial institutions in the shadow banking system are not subject to the same regulation as depository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base. This was the case despite the Long-Term Capital Management debacle in 1998, where a highly-leveraged shadow institution failed with systemic implications.

    Regulators and accounting standard-setters allowed depository banks such as Citigroup to move significant amounts of assets and liabilities off-balance sheet into complex legal entities called structured investment vehicles, masking the weakness of the capital base of the firm or degree of leverage or risk taken. One news agency estimated that the top four U.S. banks will have to return between $500 billion and $1 trillion to their balance sheets during 2009. This increased uncertainty during the crisis regarding the financial position of the major banks. Off-balance sheet entities were also used by Enron as part of the scandal that brought down that company in 2001.

    As early as 1997, Fed Chairman Alan Greenspan fought to keep the derivatives market unregulated. With the advice of the President’s Working Group on Financial Markets, the U.S. Congress and President allowed the self-regulation of the over-the-counter derivatives market when they enacted the Commodity Futures Modernization Act of 2000. Derivatives such as credit default swaps (CDS) can be used to hedge or speculate against particular credit risks. The volume of CDS outstanding increased 100-fold from 1998 to 2008, with estimates of the debt covered by CDS contracts, as of November 2008, ranging from US$33 to $47 trillion. Total over-the-counter (OTC) derivative notional value rose to $683 trillion by June 2008. Warren Buffett famously referred to derivatives as “financial weapons of mass destruction” in early 2003.

    Everything is is just allot of deception and BS… The comments made are totally miss informed and not base on historical facts.

    Dr. Carlos M. Alcocer

    February 11, 2010 at 3:28 pm

  15. “That’s Right, Nate,” shame on you.

    You need to stop blogging BS like this. Since you are apparently blind to the level of your racist prejudice and ignorance on such topics, you really need to take a different tactic on how you gather your facts, reference test, etc. Write from a perspective that HELPS our country vs contribute more harmful partisan accelerant-type words which only lend fuel to a national fire built to foster ignorance (constructed/contrived by our government, Big Biz, etc.

    Nate, interesting that you are “a great boss.” No black peers in your stable of friends who you do not have a hierarchical position over? Your racialism is an obvious blind spot. So is your partisan rhetoric.

    Dr. Alcocer’s post is of value. Follow suit. Be a contributor not an inhibitor.

    MBQ

    June 27, 2012 at 12:40 pm


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