Obama is the Next FDR

[Bengalzona]

(06-09-2015, 01:25 PM)JustWinBaby Wrote: No, that is a fundamentally gross misunderstanding to how the financial crisis came about, and has its roots in banking and housing regulation signed by Clinton.  Another key factor was the fiscal/reinflation policy following the internet bubble and 9/11, similar policies used by Obama but put on steroids.  You were reading it all daily, you just never understood what was really going on (again, back to the question what ARE you reading?!?)

Bush also asked Congress to reign in Fannie and Freddie in 2006.  The Democratic Congress refused.

There is no revisionist history, only the partisan history you support to prop-up Obama for some unknown reason.  The economy was stabilized before Obama took office.  The crisis was over, what was left to Obama was the recovery...and because that recovery has been so dismal we have people pushing the story that Obama saved us from a Great Depression.  And you can blame Repubs for resisting recovery efforts and jobs bills all you want - Dems didn't need a single Repub vote to pass Obamacare.

What you call bailouts (you forgot to mention the UAW bailout, if you're going to call a spade a spade) are also called stabilization and liquidity injections...and the taxpayer made money, and continues to make money, on those "evil" bailouts (or what other people might call LOANS).

For starters, the GM "bailout" (actually, it was a chapter 11 reorganization: http://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization ) took place in June of 2009. Bush had nothing to do with that. Nor, being a good conservative, would he have had anything to do with it. Laissez faire, you know. Republicans at the time screamed bloody murder because the Federal government was bailing out a private business. As far as the government making money on that deal, they did not: http://www.reuters.com/article/2014/04/30/us-autos-gm-treasury-idUSBREA3T0MR20140430 . They were $11 billion in the hole as of 2014. But GM and its shareholders made money, as Fred pointed out before: http://money.cnn.com/2014/05/29/news/companies/gm-profit-bailout/ . So, the GM bailout was by no means a "Bush thing". It has been and always will be an "Obama thing". Did it help with recovery? It helped mitigate damages due to the recession and provide some degree of stability to the shaky economy by not adding to unemployment. Was it worth it? Depends upon whom you ask.

As far as the Great Recession, the crisis was far from over when Obama took office. The National Bureau of Economic Research cites the duration of the recession itself as between December 2007 and June 2009. But unemployment and lack of faith in the financial system have lingered. Crises that led to the recession started earlier: The Housing Bubble in 2006 and Credit Crisis in in 2007. I agree with you that part of the blame goes back to Clinton in the 90's and his admin's efforts to put "everyone in a home". But that is only part of the blame. The other half is with the Bush Admin for further encouraging bad lending by deregulation. And both Admin's were supported by "Let the good times roll" Congresses which eschewed watchdog efforts. Regulations from the Great Depression era were relaxed to allow shadow banking and sub-prime loans.

As far as Fannie Mae and Freddie Mac, Bush didn't want to just reign them in. His admin, like Republicans since 1938, wanted to get rid of them altogether. They still do. They did play a role in the financial crises. But they were not the major instigators. They were followers. The main players initially were private lenders who were encouraging sub-prime loans and other "new" financial products. This started in the 90's. More and more, money began to flow to these companies from foreign investors through shadow banking. Fannie Mae and Freddie Mac didn't become active in these types of loans until the early 2000's. Their involvement was like adding gas to the fire. It hastened and increased the Housing Bubble and the Credit Crisis. But they were not the initial cause. And as far as reigning in the agencies in 2006, Bush did call for that. But by that time it didn't matter much anyway, the housing bubble had already burst. Fannie Mae and Freddie Mac reigned themselves in, just as all other financial institutions tried to do at that time.

For the record, I do not claim that Obama "saved us from the Recession". In fact, I am of the opinion that him and Congress could have done much more during his first four years to improve the recovery. Also, I generally see ObamaCare for what it really is: a piece of Nixon-era legislation re-introduced and championed by Obama as a promise to Ted Kennedy in return for his political support. But Bush doesn't come out of this smelling like a rose. Both he and Clinton have manure on their hands regarding the recession. So, yeah, I rail against pro-Bush comments regarding this.