An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
The government has a responsibility to make fiscal, monetary and regulatory policy to maintain income and employment levels for its citizens. No one else has the power to do it. Because politicians and regulators chose to deny or ignore their powers, it doesn't excuse them for failing to wielding and exercise those powers.
The congress and regulators can hardly claim to have not known about the products and underwriting process used by Countrywide and other banks -- We know for a fact that most had Alt-A real estate loans from these very banks!
Surely when government sets regulatory requirements for banks, they consider their economic and fiscal policies. If congress decides to do a free trade deal that will unemploy 10 million people, they require banks to hold more capital right? If they are cutting social safety nets, they require stronger underwriting requirements, right? When the government sets economic targets, they adjust fiscal policy to try and meet them, right? Or not? Is countrywide to blame for incomes stagnating? or is that government policy? Who is responsible for setting policy?
The buck stops at Alan Greenspan as chief regulator which decided that markets are self-regulating, even in the face the FBI warning about massive fraud in the mortgage industry in 2004.
Of course, the buck stops ultimately at the Oval Office, and W. was president at the time.
2 comments:
I actually agree with Mozillo and the Banks.
The government has a responsibility to make fiscal, monetary and regulatory policy to maintain income and employment levels for its citizens. No one else has the power to do it. Because politicians and regulators chose to deny or ignore their powers, it doesn't excuse them for failing to wielding and exercise those powers.
The congress and regulators can hardly claim to have not known about the products and underwriting process used by Countrywide and other banks -- We know for a fact that most had Alt-A real estate loans from these very banks!
Surely when government sets regulatory requirements for banks, they consider their economic and fiscal policies. If congress decides to do a free trade deal that will unemploy 10 million people, they require banks to hold more capital right? If they are cutting social safety nets, they require stronger underwriting requirements, right? When the government sets economic targets, they adjust fiscal policy to try and meet them, right? Or not? Is countrywide to blame for incomes stagnating? or is that government policy? Who is responsible for setting policy?
The buck stops at Alan Greenspan as chief regulator which decided that markets are self-regulating, even in the face the FBI warning about massive fraud in the mortgage industry in 2004.
Of course, the buck stops ultimately at the Oval Office, and W. was president at the time.
FBI warns of mortgage fraud 'epidemic'
Seeks to head off 'next S&L crisis'
From Terry Frieden
CNN Washington Bureau
Friday, September 17, 2004
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