dc_dux

Or perhaps the problem can be traced back to "helping banks" through banking deregulation in the 1980s and 90s.

The Depository Institutions Act of 1982 , a major Reagan deregulation initiative, was supposed to “revitalize” the housing industry by freeing up the S&Ls to make more loans. Instead, the regulation rollback led to what economist John Kenneth Galbraith called “the largest and costliest venture in public misfeasance, malfeasance and larceny of all time” as they engaged in a fury of high-risk lending. (remember the S&L fiasco? little did he know what was ahead with further deregulation 17 years after that fiasco!)

Following tighter regs in the early 90s as a result of the S&L crisis, Clinton and his Treasury Sec. Rubin (a Wall St, insider) ultimately caved in 1999 to pressure from the Repub Congress, led by Sen. Phill Gramm, and enacted the Financial Services Modernization Act of 1999 which was described in a WSJ editorial as an end to "unfair restrictions imposed on banks during the Great Depression." Many other economists dubbed the legislation the "finance industry's deregulation wish list."

And we know the rest of the story.

BTW, former Sen. Phill Gramm is currently one of McCain's principle economic advisors and a banking lobbyist with questionable ethical conflicts of interest.

edit....Gramm recently stepped down as chief Washington lobbyist for the Swiss-based investment bank UBS (which was recently under investigation for a financial scam in Texas and sub-prime irregularities in Mass) and turned the position over to his former chief of staff.

__________________
"The perfect is the enemy of the good."
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