A lot of the blame can be laid right on the US Treasury Department's doorstep for what is happening now.
After all, they are
suppose to be the ones responsible for supervising national financial institutions.
United States Department of the Treasury
Responsibilities
The basic functions of the Department of the Treasury include:
******SKIP******
# Supervising national banks and thrift institutions;
# Advising on domestic and international financial, monetary, economic, trade and tax policy - fiscal policy being the sum of these, and
the ultimate responsibility of Congress.
# Enforcing Federal finance and tax laws;
(Thrift institutions are savings and mortgage companies)
Problems started with the "thrift institutions" back in the 1980's with the "Savings and Loan Crisis". And one of the causes blamed for this
crisis is the lack supervision from the Treasury Department.
Savings and loan crisis
Major causes according to United States League of Savings Institutions
The following is a detailed summary of the major causes for losses that hurt the savings and loan business in the 1980s:
******SKIP******
14. Federal and state examination and supervisory staffs insufficient in number, experience, or ability to deal with the new world of savings
and loan operations.
So here are people from the United States League of Savings Institutions telling the government that the people they have in charge of supervising
them are "inexperienced" and unable to do their jobs.
So, as far back as the 1980's the banking industry has been saying that the Treasury Dept. has been inept.
So, then in the years following, federally insured savings and loans companies fell from 3,234 to 1,645.
Consequences
While not part of the savings and loan crisis, many other banks failed. Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit
Insurance Corporation (FDIC) were closed or received FDIC financial assistance.[13]
From 1986 to 1995, the number of US federally insured savings and loans in the United States declined from 3,234 to 1,645.[7] This was primarily, but
not exclusively, due to unsound real estate lending.
If the Treasury Dept. had been doing its job efficiently, shouldn't they have stopped this "unsound real estate lending"?
After all, they are
SUPPOSE to be supervising these banks and thrift institutions!
So here we are, years later and the same thing happens again! A major mortgage crisis! The Treasury Department is there to prevent this.
Of course this time it took a bunch of deregulating to help this crisis happen, but shouldn't the head of the Treasury Dept. stood up and stopped
it?
And who helped in getting all these deregulations that helped cause this crisis, none other than our own Secretary of Treasury
Henry Paulson while he was working for Goldman-Sachs!
Some of the dereguating Paulson helped with!
Net capital rule
As Chairman of the SEC, Mr. William H. Donaldson presided over the April 2004 meeting. It was held at the request of the major Wall Street investment
houses, including Goldman Sachs, then headed by future Treasury Secretary Henry M. Paulson, Jr.. The firms requested the release from the net capital
rule. The complaint that was put forth by the investment banks was of increasingly onerous regulatory requirements -- in this case, not U.S. regulator
oversight, but European Union regulation of the foreign operations of US investment groups.
In the immediate lead-up to the decision, EU regulators also acceded to US pressure, and agreed not to scrutinize foreign firms' reserve holdings if
the SEC agreed to do so instead.
BUT, Paulson didn't want SEC (Security Exchange Commission) oversight either, so he pushed to have that removed also!
Henry Paulson
The 1999 Gramm-Leach-Bliley Act, however, put the parent holding company of each of the big American brokerages beyond SEC
oversight. In order for the agreement to go ahead, the investment banks lobbied for a decision that would allow "voluntary" inspection of their
parent and subsidiary holdings by the SEC.
During this repeal of the net capital rule, SEC Chairman Donaldson agreed to the establishment of a risk management office that would monitor signs
of future problems. This office was eventually dismantled by Chairman Cox, after discussions with Paulson. According to the New York
Times, "While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the [new] Treasury secretary, that proposed to reduce their
stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to
complain that the blueprint would neuter the agency."[11]
In late September 2008, Chairman Cox and the other Commissioners agreed to end the 2004 program of voluntary regulation.
Does Paulson really sound like somebody who
REALLY has a grasp on how the economy works and what is in the future for the economy?
Views Expressed by Paulson as Secretary of the Treasury
In Spring 2007, Secretary Paulson told an audience at the Shanghai Futures Exchange that "An open, competitive, and liberalized financial
market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental
intervention." [18]
In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global
economy in decades. [19]
On July 20, 2008, after the failure of Indymac Bank, Paulson reassured the public by saying, “it's a safe banking system, a sound banking
system. Our regulators are on top of it. This is a very manageable situation.” [20]
On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie
Mac.[21] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.
It's hard to believe Paulson is in the position he's in, and no wonder why he wants to have private companies handle the $700 billion bailout!
The man is clueless, just rolls with the flow!
In my opinion, I think he's in over his head!
Why wasn't an economics professor given the job of Secretary of Treasury?
[edit on 10/6/2008 by Keyhole]
Calm down? Basically I think I am pretty calm in regards to the situation. What I get frustrated about is blaming Joe/Joeann American. 
