[quote=davelj]Trying to pin the blame on one particular party or administration is a fool’s errand. Arguably, this crisis was set in motion with the formation of the FDIC (and, no, I’m not blaming Roosevelt – just making a point).
Here’s the problem. Eventually our financial system was going to blow up. It was just a matter of “when”. Each party and administration over the last many decades has played some small role and the cumulative errors finally produced the straws that broke the camel’s back.
It’s not unlike the Peter Principle that, “in a hierarchy every employee tends to rise to their level of incompetence”. Folks keep rising up the ladder until they finally fail, such that in time, every position tends to be occupied by an employee who is incompetent to carry out their duties.
In our financial system, folks kept arguing for less regulation and more “freedom” (and more leverage) until things finally blew up. Because prior to the blow up, they would all point to the system’s “success” and say, “See, no problems… so, why don’t you just let us do just a *smidge* more of [insert systemically dangerous activity here]”. And finally the straw broke the camel’s back.
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All this started with the rise of movement conserrvatism. Friedman, Reagan and Cato.
between 1935 and 1985, the US had an amazing period of financial stability. Then the Banks got Jake Garn and Ferdinand St Germain to et them engage in interstate banking, and the rise of giant national markets.
within a few years the S&Ls collapsed and then after that we had crisis after crisis.
Reagan sold these ideas, and it became part of GOP doctrine.
