How History Repeats Itself…… Once Again

by: Engineer of Knowledge

It was Albert Einstein who said, “Insanity: doing the same thing over and over again and expecting different results.”

Well I am passing on chronological accounts of the Republican’s mantle of “Government is not the Solution to our Problems; Government is the Problem.”

Ronald Reagan Administration:

Our current banking crisis started with Ronald Reagan when he signed the “Tax Reform Act of 1986” and one of his proudest moments of wiping out some “Government Regulations.”

The deregulation of Savings and Loan Associations (S&Ls) in 1980 gave them many of the capabilities of banks, without the same regulations as banks.  Savings and loan associations could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, state-chartered thrifts rushed to become federally chartered.  More important, however, was the moral hazard of insuring already troubled institutions with public dollars.  In the view of a savings and loan president or manager, the trend line was fatal over the long haul; thus, to get liquid, the institution had to take on riskier assets, particularly land.  When the real estate market crashed, the S&Ls went with it.  By insuring the risk, the government guaranteed that desperate S&L owners and managers would engage in ever more risky investments, knowing that if they were successful, the institution would be saved, and if unsuccessful, their depositors would still be bailed out.

The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of about 747 out of the 3,234 savings and loan associations in the United States.  As of December 31, 1995, The Resolution Trust Corporation (RTC) was a United States Government owned asset management company run by Lewis William Seidman and charged with “Liquidating assets, primarily real estate-related assets such as mortgage loans, that had been assets of the Saving and Loan Associations” (S&Ls) declared insolvent by the Office of Thrift Supervision (OTS) as a consequence of the Savings and Loan crisis of the 1980s. (Does this sound familiar?)  The RTC estimated that the total cost to the Middle Class Tax Payers for resolving the 747 failed institutions was $87.9 billion.  It was at this time that the citizens cried to have the Bank Laws readdress and reinstituted as they were before they were removed as the “Problem Of Government.”  It was not to be done and the problem was just compounded and got worse and repeated once again.

Texas Savings and Loan Real Estate Crash:

With the Deregulations still in place the “Texas Empire Savings” in Texas revealed land flips and other criminal activities. Half of the failed S&L’s were from Texas, which George W. Bush operated one with his brother, pushed that State into recession.  I might add that the rest of theUnited States was enjoying some of the best economic booms in recent memory.  As bad land investments were auctioned off, real estate prices collapsed, office vacancy rose to 30%, and crude oil prices fell 50%.

After the devastation and raping of the “Texas Savings and Loans,” the ignorant people of Texas elected George W. Bush Governor because he was a “Conservative Born Again Christian.”  (When did these words translate into “Thief?”)

The George W. Bush Administration Years:

Still the unabashed “Deregulated Banking Industry” still kept up the pace that eventually led to sloppy bookkeeping, poor investment decisions, and the explosion of sub-prime lending.  In the years past before the removal of those “Economic Killing / Anti-Business” laws that were in place before Reagan’s attack on them, would have caused a government crackdown in those earlier years.

But yet once again more regulation practices were removed by the passage of the Sarbanes-Oxley Act 2002 and signed, notably, by George W. Bush!!  At the same time, however, this same President invoked an obscure 1863 law forbidding states to regulate local banks to make sure no restrictions could be place on the Banking Industry by States trying to protect themselves from the economic abuses.

(Interesting?!?  What about “States Rights” being employed when they don’t like the Federal Laws from the same Conservative Republicans)

Therefore, the George W. Bush Administration has the “DUBIOUS HONOR” of removing the last safeguard regulations that protected the “Middle Class” from the industry and we just saw the worst “Banking Melt Down since the Great Depression.”

Now just like on Que and on Script this 2012 Election Year, we are hearing once again from the Ultra-(Bought and Paid For) Conservative Republicans running for all offices, “That the problem with our economy is all of those Restricting Federal and State Law Regulations that need to be removed because they are Job Killing / Anti-Business!!”

My closing reply to those who have bought into this propaganda crap…… “Start reading at the top of this article once again to see where the problem LIES!!!!!”

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11 thoughts on “How History Repeats Itself…… Once Again

  1. Thanks, Engineer, for this post. As a member of the Grand Old Party, your observations about the right wing of your party are especially poignant. During tonight’s Xth GOP debate, will we hear anything other than what you have posted above? Better yet, will The People look for anything different than the same-old stuff?

    How long can one fool The People and get away with it?

    More importantly, will The People learn anything about job-creation during the debate? Or will it be all about religion, abortion, immigration, guns…[the usual set of ho-hum ‘issues?’]

    We may ask: how many times can a dog and pony show offer the same trick before the audience is no longer interested?

    1. How about as long as the media sponsors of these so-called debates
      do not ask the questions that need to be asked. The Fourth Estate is
      failing the 99% badly. Yet, when you listen to these media heads on their
      program news programs, oops, I mean “shows” they have their knives
      out and asking all the right questions with their guest commentators. However, let the candidate be on set and its milk toast. I surmise the
      reason is that they personally do not want to upset the candidate to the
      point where he or she won’t come back on their “show”. What’s
      interesting is that the opposite happened on Fox News of all places. I am
      sure you have seen Bret Baier’s question to Mitt Romney about the
      mandates and how he became visibly angry that he would be questioned
      on the topic. Why did it occur on Fox News?

  2. UTF, I would say that the reason it occurred on FOX is because it is the network that the Republican candidates fee the most comfortable on. The business commentators seem to have the most acumen in asking realistic questions of the candidates. And of course you are correct in pointing out that the media has failed the American public miserably in dealing with the world of economics. Engineer points out the roots and origins of the present financial banking crisis, but in the reporting of it in the present sense, it is as if nothing ever happened before the actual shit hit the fan in 2008.
    It is the media’s responsibility to educate, but they fail us again and again. The facts aren’t sexy. History doesn’t sell hot cakes. Reality is a lame tedious boring repetition of numbers and facts compared to the sensationalism, the hyperventilating carpet of limited attention span oriented noise generated by Wolf Blitzer.

  3. EOK- That is a very good read. I have one question .
    Based upon my research, “The Tax Reform Act of 1986” was passed through the Senate with a vote of 97 to 3. I could not find a vote history for the H.O.R. The Senate was comprised of 47 Democrats, and 53 Republicans.
    The “Sarbanes-Oxley Act of 2002” passed through the H.O.R. with a vote of 423 to 3, with 8 abstaining. The House at this time was comprise of 212 Democrats, 221 Republicans, and 2 independents. The Act passed through the Senate with an astonishing 99 to 0, with 1 abstaining. The Senate at this time was split 50/50 Democrats and Republicans.
    Based upon this research, and the fact that alot of people throw out Article 1, section 7, when anyone criticizes our current President, I have one question. Are you sure it’s just the Republicans that are screwing the Middle Class?

  4. JOB- Are you sure it’s just the Republicans that are screwing the Middle Class?

    I’m curious, JOB, how you make the jump from Sarbanes-Oxley to your speculation that only the GOP is ‘screwing’ the middle class.

    The intent of the Sarbanes Oxley Act is to force top management to be responsible and transparent in their accounting processes so that investors know about their holdings in the company and whether or not their investments are in jeopardy.

    Engineer wrote this about the Sarbanes-Oxley signing: But yet once again more regulation practices were removed by the passage of the Sarbanes-Oxley Act 2002 and signed, notably, by George W. Bush!! At the same time, however, this same President invoked an obscure 1863 law forbidding states to regulate local banks to make sure no restrictions could be place on the Banking Industry by States trying to protect themselves from the economic abuses.

    Which political party does GW Bush belong to?

    Is it not a safe assumption that the GOP [represented by GW Bush] attempted to circumvent S-O?

  5. Mud- I am not speculating that only the GOP is screwing the middle class. I am saying that the middle class is being screwed by both partys.

    EOK wrote, ” Our current banking crisis started with Ronald Reagan when he signed the “Tax Reform Act of 1986” and one of his proudest moments of wiping out some “Government Regulations.”…..He also wrote, ” But yet once again more regulation practices were removed by the passage of the Sarbanes-Oxley Act 2002 and signed, notably, by George W. Bush!!”
    According to Article 1, Section 7 of the Constitution, Democrats are just as much to blame for the Acts that EOK wrote about. That is my point.

    Bush is a Republican.
    Is S-O good or bad in your view? The way it was written by EOK, it’s made to sound bad. I’m confused.

  6. Hello J.O.B.
    As Muddy has summed up and answered your question quite well, I will also pass on that Senator Paul Sarbanes was the Democratic Senator from my area of Maryland and was representing the intrest and protections for all the citizens of my area. He was quite well respected by all no matter what party they belonged to. He was a good and honoralbe man in the Senate for Maryland and got many Republican votes as well as Democratics in our area of Maryland.

    As I am glad you ask questions, I hope this makes things a little clearer for you. Thank you again.

    1. EOK- I apologize, but I think you wrote your post wrong. It sounds to me that you & Mud think S-O is a good thing. But when you published your post, you made S-O sound like a bad thing. I’m sure it was accidental.

      Don’t get me wrong, I agree that the Republicans have played a big part in the deregulation. I just don’t think that your giving the Democrats any credit. Most notably, Bill Clinton. I found this while researching the Bush-1863 law.

      Major banks and financial service firms regularly lobbied for deregulation in the United States since the 1970s. The bulk of the deregulation was performed under the Bill Clinton administration, sandwiched between the two Bush administrations of George H.W. Bush (1988-1992) and George W. Bush (2000-2008). However, the two Bush administrations were far from inactive in the deregulation sphere

      Read more: Deregulation of Financial Markets Under George Bush | eHow.co.uk http://www.ehow.co.uk/info_7748733_deregulation-markets-under-george-bush.html#ixzz1itEchr8R

  7. Any initiative by The People or their representatives in Congress to monitor the corporate culture as well as the banking industry is welcomed by me.

    The recent obfuscation of that principle is strikingly apparent in the year-long filibuster by the GOP of a person to head the Consumer Financial Protection Bureau. Does that not strike you as a GOP attempt to circumnavigate the enforcement of such consumer protections such as the Sarbanes-Oxley Act?

    Surely, JOB, your stubborn adherence to the right-wing agenda blinds you to the underlying mission of the GOP to keep The People from knowing what goes on behind closed corporate boardroom doors.

    …or, didn’t you know that this is a primary mission of the current GOP?

  8. Mud- “Surely, JOB, your stubborn adherence to the right-wing agenda blinds you to the underlying mission of the GOP to keep The People from knowing what goes on behind closed corporate boardroom doors.”
    I do not understand why you think I’m adhering to some agenda. I DO, repeat, DO think we need regulating of the banking industry. I just think believing that the deregulation is solely because of the GOP is very naive.

  9. Hello J.O.B.
    The Sarbanes Oxley Act law was to force the “Top Banking Management” to be responsible and transparent in their accounting processes so that investors could know about their holdings in the Bank they were dealing with and whether or not their investments are in jeopardy. Paul Sarbanes was really always there for the “Middle Class Working People” to protect and represent them.

    The point I am making, “It Was The Rider,” that President Bush added upon his signing and became so famous for on many other laws he signed. Per his “Rider Interpretation” added at the signing, that invoked the obscure 1863 law forbidding states to regulate local banks to make sure no restrictions could be place on the Banking Industry by States trying to protect themselves from the economic abuses. In summation, it was the “Rider” that made null and voided the Sarbanes-Oxley Act while he was signing it into law. It was the “Rider” that became the prevalent aspect of the law and not what Sarbanes and Oxley had intended.

    Allow me to give you another example of a G.W. Bush “Rider” on a Bill. It was the Bill that provided Federal funds to upgrade and modernize the Postal Service. Upon signing the funding Bill, Bush added a “Rider” that stated that he viewed that this Bill also gave the Federal “Anti-Terrorist” aspect open access to seize and open all mail sent through the Postal Service. So what had for so long been the honored PRIVACY of your personal mail being sent through the Postal Service, with this one signing of a funding Bill, was rendered it NO MORE! Ben Franklin is rolling over in his grave with this loss of Civil Rights that he had honored and respected his time as Postmaster General.

    I hope that this explanation makes it more clear for you, but as always, I will always welcome your questions as I do want you to understand and learn from my postings. I am a Mentor. :-)

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