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Originally Posted by another Linda
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It really made me doubtful that any "rescue plan" (formerly known as a bailout) will work. Certainly if the government does nothing we are in big trouble, but I am beginning to think that whatever the government does we are all in for hard time.
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Very discouraging. My question is whether or not adequate banking regulations would have prevented this. It sounded like the wonderful "innovative financial products" might still have been developed and any regulations would have only slowed the pace of this disaster.
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Depends what the government does....throwing money without simultaneously fixing the root cause(s) of the problem just means we're throwing money wildly in the air.
Until late 1999 the post-1929 (Glass-Steagall Act of 1933) governed the financial industry. However, the quest for higher profits (at much greater consumer risk) led to heavy lobbying and the resulting Gramm-Leach-Blibey Financial Services Modernization Act of 1999 which axed Glass-Steagall and allowed the morphing of banks and other financial institutions into the mega-monsters which are now collapsing and screaming for taxpayeer bailout. For interesting reading, just google the Financial Services Mondernization Act, read the legislative history and see who voted for it. Amazingly. almost all of the supposed Congressional saviors voted for this Act, and most of them have a long track record of reeiving financial industry campaign contributions.
So, it's difficult to trust those who got us into this mess when they now yell "the sky is falling" in panic mode, and their only answer is to throw money at the industry which has been bolstering their campaign coffers for years. I wonder how much of the money will end up back in the Executive Offices of these financial industry giants and/or as further contributions to the Congresspersons who whipped the vote.