Newsmax’ ratings* are dropping drastically as UFO (Uninformed, Fictitious Opinion) sightings increase.
On Newsmax’ April 21, 2023, several hosts: Chris Salcedo, Greg Kelley, Carl Higbie, and Rob Schmidt – a cacophony of unqualified commentators- laid all the 2008 Financial Crisis blame on the Democrats – literally delivering the same stand-alone one-liner. Newsmax’ parrots’ political animas blurred the blame line for that financial catastrophe. The “conservative” Party Line repeated by successive hosts mirrored the Leftist Media’s talking points. Both sides are misguided by misinformation because both are motivated by myopic partisan angst.
To accurately lay blame read The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States [Authorized Edition] January 2011. For those with short attention spans, the Report wisely begins with Conclusions of the Financial Crisis Inquiry Commission:
- This financial crisis was avoidable. The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks.
- There were warning signs. They were ignored or discounted. There was pervasive permissiveness, little meaningful action was taken to quell the threats.
- The prime example was the Federal Reserve’s pivotal failure to stem the flow of toxic mortgages. The Federal Reserve was the one entity empowered to do so and it did not.
- Financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective; firms depended on tens of billions of dollars of borrowing that had to be renewed each and every night, and investors blindly relied on credit rating agencies as their arbiters of risk.
- More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards,
- In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor.
- Government Regulators had the power to protect the taxpayer and chose not to use it:
- The Securities and Exchange Commission (SEC) could have required more capital and halted risky practices at the big investment banks. It did not.
- The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not.
- Policy makers (Congress) and regulators could have stopped the runaway mortgage securitization train. They did not.
- Regulators lacked the political will– in a political and ideological environment that constrained it – as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee..
- Too many financial institutions, as well as too many households, borrowed to the hilt. [How many people do you know who played the system taking out home loans buying another house to increase income (ignoring debt risk) instead of paying off their primary residence?]
- The Federal Reserve and other regulators and authorities heard warnings from many quarters. Yet the Federal Reserve neglected its mission “to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.
- The enactment of legislation in 2000 (at Alan Greenspan’s recommendation) to ban the regulation by both the federal and state governments of over-the-counter (OTC) derivatives (hidden in an Agricultural Bill) was a key turning point in the march toward the financial crisis.
- There were three causes of the crisis: capital availability and excess liquidity, the role of Fannie Mae and Freddie Mac, and government housing policy.
- Both Presidents Bill Clinton (D) and George W. Bush (R) set aggressive goals to increase home-ownership [Bush, Jr. (R) was warned of the impending disaster and relied on Alan Greenspan’s hubris and fatal assessment.
- Alan Greenspan was Chairman of the Federal Reserve under Presidents Reagan (R); George H.W. Bush (R), Bill Clinton (D), and George W. Bush (R) under whom the financial collapse occurred.
- Treasury Secretary Henry Paulson served under George W. Bush (R) from 2006-2009. He was chairman and CEO of Goldman Sachs prior to becoming Treasury Secretary
- Ben Bernanke (R), Chairman of the Federal Reserve, under George W. Bush (2006) and Barack Obama. Bernanke, according to the New York Times, “failed to see [or listen to warnings] the impending financial crisis.”
- Timothy Geithner, served as President of the Federal Reserve Bank of New York, 2003-2009 under Bush, Jr. (R) and Secretary of the Treasury 2009-2013.
- Robert Rubin, spent 26 years with Goldman Sachs before being appointed Secretary of the Treasury during the Bill Clinton
- Secretary Levitt, (R), 14th Governor of Utah, served under George W. Bush from 2005-2009.
The only “voice crying in the wilderness”- Brooksley Born (D)- was Chair of the Commodity Futures Trading Commission (CFTC) from 1996-1999 under Bill Clinton (D). In 1998, Born unsuccessfully tried to bring over-the-counter financial derivatives under the regulatory control of the CFTC. Born battled other regulators in the Clinton administration, members of Congress and Wall Street bankers over the regulation of derivatives. Her efforts brought fierce opposition from Wall Street and Administration officials (Greenspan, Rubin, Levitt, and Summers) who believed deregulation was essential to economic growth. Her adversaries eventually passed legislation prohibiting the CFTC from any oversight of financial derivatives. She resigned in 1999 warning the impending financial collapse would be repeated more frequently and become increasingly worse if not corrected. (see: www..cftc.gov Testimony of Brooksley Born)
- “Our financial system (2011) is, in many respects, still unchanged from what existed on the eve of the crisis. The U.S. financial sector is now more concentrated than ever in the hands of a few large, systematically significant institutions.” P. xxvi
- ****On December 11th 2014, the House of Representatives passed a broad spending bill that rolls back a rule affecting derivatives, the financial product that helped cause the financial crisis of 2008. The Senate is expected to pass the budget legislation containing the repeal this weekend. A repeal would show that, six years after the financial crisis, large banks have found a way to kill off regulations that were part of the Dodd-Frank Act, the sweeping legislation that Congress passed in 2010 to overhaul the financial system.” (Sierra Vista Herald, Monday, Dec. 15, 2014)
So, Newsmax’ hosts Chris Salcedo, Greg Kelley, Carl Higbie, and Rob Schmidt, when you parrot the Party Line blaming Democrats for the 2008 Financial Collapse it might be a good idea to do some actual journalistic investigating before painting with your broad, political brush.
The Dems and Republican politicians, economists, and CEOs who created the bubble and profited from the collapse avoided responsibility by “bailing out” their incestuous kin with our money. They put John Dillinger to shame in proportion.
Read David A. Stockman’s The Great Deformation: The Corruption of Capitalism in America, 2013. In it he calls the incestuous relationship between Congress, The Fed, and Wall Street as “a casino in a whorehouse.”
Also: The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin.
“Today in America there is only one Political Party – the Banker’s Party.” – Charles E. Coughlin, Money Changers in the Temple, June 19, 1939
“Government by the people and for the people doesn’t give the government the right to rob the people.” – John Adams
“I am neither Federalist nor Anti-Federalist; I am of neither Party.” – Thomas Jefferson, On the New Constitution
“The federal government has become a parasite to extreme capitalism.” – Laski
“It has transcended political boundaries making the federal government incapable of independent governance.”– Harold J. Laski, 1939
*An “IMHO” poll conducted April 21, 2023 with a population sampling of one.
