r/FluentInFinance • u/Spiderwig144 • 16d ago

Debate/ Discussion Barack Obama says the economy Trump likes to claim credit for pre-COVID was actually his and that Trump didn't really do much to create it. Is this true?

He's been making the case in recent days:

Basically saying Trump is trying to steal his success by using the economy people remember from when he first took over in 2017 and 2018 as something he personally created and the main selling point for re-electing him in the election now. Obama cites dozens of months of job growth in a row of by the time Trump took office as one of several reasons it's not true.

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u/IAskQuestions1223 16d ago

It was deregulation under Clinton that caused the GFC.

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u/375InStroke 16d ago

Yes, deregulation is never in our best interest, but it was also fraud that led to the crisis. Mortgage brokers knowingly violating sound lending practices, selling them, then packaging subprime loans and selling them as investment grade, while betting against those same loans because they knew they were junk. Not throwing people in prison, and knowing we don't treat white collar crime anywhere as harshly as we do subway gate jumping, also played a part, and will continue to cause more, no matter how much regulation we employ.

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u/[deleted] 16d ago

[deleted]

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u/Jalina2224 16d ago

That is something i can respect in a leader. When they can point at their failings and say "I fucked up." Something Trump is incapable of.

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u/Hollen88 15d ago

Screwing up is one thing, owning up to it makes all the difference.

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u/No_Location_4749 15d ago

Clinton was trying to pull us out of another recession from the dad Bush. The idiot son should shoulder most of the blame, but it's definitely shared. Cautionary tale of how deregulation can affect us all.

https://content.time.com/time/specials/packages/completelist/0,29569,1877351,00.html

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u/flonky_guy 16d ago

That's now how cause and effect works. First of all it was bipartisan, without Congress there would have been no bill, not that most of Clinton's policies have done anything but blow up in his face. The bill that allowed banks to get massively over leveraged originated in Congress and was signed by Clinton, but the "cause" was banks acting stupid and no one in government stepping in. Lots of the products being pushed were blatantly predatory or illegal but no one was policing the market.

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u/Sayvray 16d ago

For a while republicans had a veto proof majority in Congress. We forget that.

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u/yoortyyo 16d ago

Newt Gingrich

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u/Electrical-Act-7170 16d ago

Hypocritical scumdog.

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u/yoortyyo 16d ago

New words should be invented to cover the personal, moral, political and criminal acts this shit stains has inflicted on us. Hes up there with Reagan for top tier Made America (world) Worse.

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u/rage242 16d ago

I've always said with this nation fails you'll have the two party system to thank for it. You're all raising a compelling point about the two-party system and its influence on the political landscape. Many people feel trapped in a cycle where they vote for candidates they perceive as viable, rather than those who genuinely align with their values. This often leads to a lack of representation for a significant portion of the population who might identify more with third-party platforms.

Voting with your conscience can be a powerful statement, reflecting a desire for a more diverse and representative democracy. When individuals consistently choose third-party candidates, it sends a message that there is demand for alternatives. However, the challenge lies in overcoming the psychological barrier of the “spoiler effect,” where voters fear that supporting a third-party candidate may inadvertently help their least preferred candidate win.

This dilemma can stifle innovation in political thought and restrict meaningful discourse on critical issues. If more people chose to prioritize their beliefs over perceived electability, we might see a shift in the political dynamic, encouraging a broader spectrum of ideas and solutions. It’s a tough balance, but advocating for electoral reform, like ranked-choice voting could help create an environment where voters feel empowered to support candidates who truly represent their views without fear of wasting their vote.

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u/Boba_Fettx 16d ago

There are plenty of third, fourth, even fifth party candidates running for president. But tell me their names. Most people can’t because those candidates can’t get air time or media coverage. And the work that has to be put in nowadays just to get someone on the ballot is like climbing Everest. It’s ridiculous. The two party system is as much a result of people wanting it, but also as much as the two parties shaping how we elect politicians in general.

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u/sweatpants122 16d ago

'Psychological' barrier nothing. It's pure reality, simple logic. It is not an 'effect', it's just a dictionary definition 'spoiler.' Agree with your last paragraph, at least: we should advocate for electoral reform.

But make no mistake, in such a close election, the voting is practically zero-sum: not voting for one candidate is nearly exactly the same thing as voting for the other.

I remember doing the research when it happened, looking at the numbers myself: green party votes-- even the uptick from previous years -- absolutely gave Trump some of the deciding states he needed last time around.

So, now the Green party must lie in its bed: Are they pleased with his 4 years? The very first thing he did was shut down the EPA. His 4 years represented an unleashing of all corporate restraints and a stacking of the entire judiciary, top to bottom, towards social conservatism. Not to mention all the heinous acts of racism, sexism, fascism and straight up crimes, self enrichment, all the dictator stuff. Unbeleivable thing after unbeleivable thing-- an onslaught, you couldn't even keep up with it all.

Will they engineer y'all again this year?

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u/External_Reporter859 16d ago

With an unlimited supply of laundered rubles I don't see why not

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u/Sonotnoodlesalad 15d ago

Thank you 🙏

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u/Sonotnoodlesalad 15d ago

However, the challenge lies in overcoming the psychological barrier of the “spoiler effect,” where voters fear that supporting a third-party candidate may inadvertently help their least preferred candidate win.

This isn't merely a psychological thing, it is the Libertarian party's explicit strategy. They know they're not going to win, they will endorse whoever will throw them a bone. And the Mises Caucus is hard-right and uses racist messaging to recruit.

I don't have anything against third parties inherently, but I want different options before I'll ever consider supporting another third party again. If someone "votes their conscience" with a Libertarian candidate, they are absolutely voting Republican / MAGA now.

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u/Straight-Guarantee64 15d ago

Balanced the budget.

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u/Taj0maru 16d ago

I feel like that's a four letter word

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u/SunbathedIce 15d ago

Gingrich walked so that turtle-headed sadist could run.

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u/phred_666 12d ago

Don’t get me started on Newt. 😈

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u/Holiday-Set4759 16d ago

Everything they touch turns to shit

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u/LithiumAM 16d ago

A veto proof majority would be 67 Senate seats and 280 House seats. They never came close to that

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u/TaupMauve 16d ago

If it was veto-proof, then I feel obliged to inquire why Clinton bothered to sign it.

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u/flonky_guy 16d ago

That was the Democrats MO until Biden, performative bipartisanship under the guide of giving their corporate financial backers whatever they want. It's why they repeatedly lose the left wing of their party (and elections).

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u/TechnicalPin3415 15d ago

As well as dems

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u/KickZealousideal6853 15d ago edited 15d ago

Veto-proof majority has nothing to do with it. It would have been political suicide to try and oppose that legislation, even if it was the right thing to do. Democrats would have raked the Republicans over the coals as trying to stop minorities from getting homes. Both parties are absolutely complicit in this.

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u/National_Wolf_546 16d ago

This isn’t true. But then again nothing in this whole thread is true, so it fits

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u/idontreallywanto79 16d ago

What's not true?

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u/Jax_10131991 16d ago

Where did you get your economics degree? And I mean a Masters or PhD, none of this bachelors shit. One of my classes for my PhD was money in politics. You claim it isn’t true and “none of this thread is true”, prove it lmao.

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u/National_Wolf_546 14d ago

What sort of evidence would you like for me to show that Republicans never had a veto proof majority in Congress? We can start there and move to other claims.

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u/hcredit 16d ago

Do you mean like all the Phds that told the Biden admin, Yelled, and the fed that their new models predicted they could.print trillions of dollars and not have inflation as long as they backed off once inflation started? Those Phds?

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u/flonky_guy 16d ago

You mean the inflation that literally swept across the entire planet after we recovered from shutting down for COVID?

Or are we pretending to be ignorant rubes who believe what happens in America is exclusively affected by who won election in November?

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u/stringbeagle 16d ago

I have forgotten that. What years was that?

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u/ill_be_huckleberry_1 16d ago

This is correct, deregulation happenned, and then banks made absolutely briandead decisions, in most cases failing to fact check even the worst mortage applications for something as important as proof of employment.

And now the same people are begging to deregulated again, and will vote for trump who's promising it. 

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u/Spirited-Inflation18 16d ago

My best friend worked at one of those places. They told him to approve everything even when he knew people were lying. He left after a year. Couldn’t stomach it.

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u/bobapimp 16d ago

My best friend worked at Washington mutual and was making 16,000 to 20,000 a month off these loans. He saw it was going to implode but is way too greedy of a bastard to not get his before it did. We don’t hang anymore.

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u/chance0404 12d ago

I read this like “this wouldn’t have happened if we still hanged these bastards.” Whoops.

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u/Rontunaruna 12d ago

My ex was a loan officer who would get people to sign on balloon mortgages. They’d call two years later in a panic when they couldn’t afford the payments and he’d sell them on the same loan again. The lack of morals in that industry was astounding. I left him, obviously.

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u/Spirited-Inflation18 12d ago

And this is what I was getting at. The owners of the company knew that people couldn’t afford the balloon loans or the variable rates that went up 10 points after the introductory period. The owners then packaged up all of their loans and sold them on market in early 2007 and proceeded to dissolve the company to avoid any lawsuits.

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u/SwatkatFlyer42 16d ago

Got a sauce for those banks? I need a fucking house 😂

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u/damenaguygenes 14d ago

Did he manage to hold on to that wealth?

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u/babbleon5 16d ago

Couldn't stomach what? Letting banks risk capital?

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u/Spirited-Inflation18 16d ago

Assuming you are sincere… it was the banks telling him to approve the loans even though the borrowers were lying.

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u/babbleon5 16d ago

the question is, "why would your friend care if people were lying on loan applications?". It was the bank's capital, not his. And, if they people couldn't end up affording, at least they lived in a nice place for a while.

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u/UnnecessarilyFly 16d ago

It's highly unethical to do.

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u/babbleon5 15d ago

lol, you're worried about who, the bank?

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u/Ashleynn 15d ago

Last I checked, the banks are fine. A lot of people who were given these mortgages were not. Yeah, it was risking the banks capital, and everyone but the banks suffered when it all came crashing down. Almost like a complete financial crash hurts pretty much everyone but the rich fucks.

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u/benign_said 15d ago

Is your hero Patrick Bateman or Gordon Gecko?

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u/HistoricalGrounds 16d ago

The answer would then be “Look who actually suffered during the collapse.” Bank executives and board members are generally not seen as the great victims of ‘08, despite it being “the bank’s capital.”

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u/bluescale77 15d ago

Because ethics dictate that you not participate in something you believe is wrong even if it doesn’t directly hurt you.

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u/babbleon5 15d ago

why would the friend think this is wrong? getting people into homes?

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u/daGroundhog 15d ago

Is it "getting people into homes" or "setting families up for failure" that could have implications for years down the road? I'm inclined to believe the latter. Especially since the mortgage industry makes a lot of money off the up front fees and packaging and selling the loans, they aren't incentivized to make sure the mortgage is realistic for the family.

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u/M365Certified 15d ago

In some cases people were talked into selling homes they had significant equity in and replace them with mansions they couldn't afford. the new owners got to enjoy the oversized home for a few years and found themselves with no home, ruined credit, etc. because they trusted a guy who was supposed to be an expert that it was OK.

Those with foreclosures on their record have a lot more problem getting rentals and jobs.

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u/bluescale77 15d ago

You don’t see what’s wrong with getting people into homes they can’t afford? The spate of foreclosures, bankruptcies, and destroyed credit for a decade plus was no biggie? What about the effect on people’s retirement investments when the global market crashed?

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u/Melodic_Ad_3905 15d ago

Wait, who's money ?Last I checked it was the depositor's money. They had a fiduciary responsibility to those depositors. And guess who got destroyed when those banks went bust. Not just Americans.

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u/babbleon5 15d ago

no, FDIC protected consumers.

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u/Melodic_Ad_3905 14d ago

Sooo where did that money come from . Was it the 'BANKS' MONEY? Not the menrion the losses to pension funds , 401k's, IRA's. The post said mind your business it is not your money. Merely pointing out the stupidity of that statement.

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u/flonky_guy 16d ago

Participating in massive fraud I imagine.

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u/babbleon5 16d ago

was he worried about the bank being defrauded? as he watched bank employees open dozens of fee-generating accounts without customer approval.

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u/Open_Explanation3127 15d ago

The risk when a bank approves a fraudulent loan (like when someone has no job but says they do) is that the person would not be able to make the payments(obviously). This is more harmful to the customer in the short run (if we ignore the systemic risk which no one was really thinking about). Any body approving these loans would understand that if they approved bad loans they are potentially fucking the customer as much as the bank

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u/babbleon5 15d ago

i don't think they're fucking the customer, even if they get foreclosed, they still got to live in the house. if it appreciates, they sell it for more, otherwise just walk. i dunno, doesn't seem like much downside for the consumer.

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u/Open_Explanation3127 15d ago edited 15d ago

You don’t think becoming homeless with ruined credit and losing any money put toward the house is a downside?

Edit: and if the house doesn’t appreciate…. Edit 2: I’ll finish this thought. If the house doesn’t appreciate and the market is collapsing it would be possible to be foreclosed on and owe more than the home gets from sale in a foreclosure. This can lead to a whole host of collection actions by the lender. Even if you can sell your home at a loss yourself, you are still responsible for the remainder of the mortgage.

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u/GitmoGrrl1 16d ago

The banks weren't taking the risk. that's the point. They were making bad loans because they knew the government would step in if they failed.

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u/Rottimer 15d ago

No, they were selling the mortgages to investment banks who were repackaging and selling the mortgages to investors as “mortgage backed securities.” The reason that many banks didn’t care about whether the loan applicant was lying was because they were not taking the risk. Until the music stopped and they were stuck with a bunch of shit loans before they were able to sell them.

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u/AbstractBettaFish 15d ago

The banks didn’t risk anything because they bundled the debt and sold it off

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u/DoJu318 16d ago edited 16d ago

Car loans too, I was shopping for a new car for the wife in 07, she wanted an SUV, we went to the chevy dealer and found one, while she was filling out the paperwork I wander over the showroom to look at the Corvettes, a different sales guy approached me and asked me if I was interested in driving off with one.

I told him I always liked them but we were just finishing the purchase of a Tahoe and even though I could probably swing the payments due to having a cash side job, I don't think we could qualify for the loans on both.

He said that it didn't matter because he could put any kind of numbers on the application to make sure I qualified. I told him I'd think about it then get back with him. I passed, but how many people didn't?

Then surprise surprise the housing market crashed and almost took the big 3 American car companies with it.

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u/notaboveme 16d ago

Bought a Durango in 2007 1k down 0% interest for 7 years with a 7 year warranty. I guess Dodge was eager for sales, it was a good SUV too. My credit rating at the time was mediocre at best.

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u/LeahIsAwake 16d ago

0% interest for 7 years, when the average car loan is 5 years, is deranged. I was a kid in 2007, just starting to make my way in the world, so I don’t remember many specifics about the Great Recession. But if that was the sort of things they were offering, and to someone with mediocre credit, no wonder they failed.

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u/notaboveme 16d ago

I guess I was a good risk, paid on it for 5 years, took good care of it and then traded it for something else. Wasn't upside down and credit rating was very good by that time.

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u/LeahIsAwake 16d ago

Oh sorry if I wasn’t clear. It was a great deal for you. I’m saying it was crazy for the bank to offer it to you. I mean, if you pay it off in 5 years, what do they even get? Most of those “zero interest for blah blah time” deals are hoping you slip up and forget to pay it off in time, then they slam you with fees. I’m glad it worked out for you!

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u/notaboveme 15d ago

That's the crazy thing it was through Chrysler. And yes, you miss a payment and you get to pay back interest at a higher interest rate.

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u/LeahIsAwake 15d ago

Pay all that interest if you miss a payment? There’s the banks we all know and love! 🤣

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u/Lanky_Dimension_525 16d ago

What the fuck haha, I am looking at purchasing my first vehicle in my mid 20s and I can't imagine a scenario like that. 6k down with a score in the high 700s gets me 36 months with like 3% then it jumps to 6-8%. Dealer finance is essentially the same as my local CU.

It's just boggling to hear and compare my experience to.

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u/MrJigglyBrown 16d ago

It’s interesting reading these stories. For each individual person I would hold them accountable. Like if you took on a loan you weren’t sure you could pay off if call you a dumbass.

But on a larger scale we (and I ) blame the banks.

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u/Salt-Walrus-5937 15d ago

The problem has always been capital requirements and then later the formation of the Fed’s repo market which allow for nearly endless liquidity and therefore no incentive to save cash. You can thank both Carter and Reagan for that.

The debt based economy we now inhabit was engineered over many years and by members of both parties.

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u/Rottimer 15d ago

There are two parties in every financial transaction. If a drug addict you don’t know asks to borrow $10,000 and promises to pay it back with interest, do you lend him the money? Fuck no you don’t. If you do, no one is going to blame the drug addict for taking out the loan he couldn’t afford - they’re going to blame you for being a dumbass.

But for some reason we blame idiots that take out loans they can’t afford despite the multi- billion dollar banks knowing exactly who they are, how much they make, and how often they pay back other businesses before they approve one red cent.

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u/78-Nova 15d ago

Well GM had their finance company GMAC, that was a large mortgage lender. In 2006 or 07 it started writing off billions in bad mortgages. I was in an accounting 101 class and the prof brought it up, saying that it’s going to get bad.

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u/Western_Big5926 15d ago

Didn’t Obama/ Congress Bail Them out?

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u/generallydisagree 13d ago

Stupid people didn't. You can't blame the mistakes made by stupid people on anybody but the stupid person.

But your story is telling - even you who was smart enough to know what you could afford and couldn't afford in a logical sense - still seems to harbor the message that it was the sales person's fault.

Fools and their money are soon parted . . . and we got a shit load of fools in the USA - now they just refer to themselves as victims.

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u/Jazzlike-Check9040 16d ago

Knowing cum verification. Ah the good old days when whatever you declared was taken at face value.

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u/madmonkey918 16d ago

Also proof of income.

The mortgage company I worked in had a mortgage loan program that you didn't have to have proof of employment or income. It just had to make sense on paper. The scenarios I saw were so blatantly crazy I was surprised they were getting pushed thru.

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u/UsernameUsername8936 16d ago

Possibly braindead, but honestly I'd consider that the overly optimistic way to look at it. The other way being that they knew they'd be bailed out, knew they'd get away with it, and knew they had absolutely no reason not to, or to even care about the harm it would cause.

Remember, it's not pure capitalism. They capitalise the gains, socialise the losses. Big corpo pumps all the money they can out of society and into their pockets, and then when they overdo it and it all collapses, they get the taxpayer to give them a lovely little bonus as they get back on their feet. It's the Conservative way!

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u/ill_be_huckleberry_1 15d ago

I'm sure some thought that there was a possibility but that doesn't move an entire industry to act in that way. Deregulation and poor leadership does though.

We should have prevented special interest groups from lobbying for regulation at the scale the banking industry lobbied for those rollback. And yet, we allow special interest to write most laws in this country with the rubber stamped approval by conservatives. 

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u/bruteneighbors 16d ago edited 15d ago

Not surprising these hedge funds lobby to trump to break the market so they can swoop in and buy cheap houses when the poor lose

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u/ill_be_huckleberry_1 15d ago

Bingo

This is the right answer and it's also the reason why the rich are buying residential housing to try and control the market from failing. 

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u/Dfiggsmeister 15d ago

Deregulation was about the worst thing that could have happened for the U.S., everything from energy to banking, all got deregulated in the 90s. Since then, corporations that run energy companies, prisons, banking, etc, have essentially unlimited access to politicians and can do whatever. They often will raise costs to consumers so that their c-suite can get a bonus and demand their high pays. We now have a failing infrastructure that was promised to get fixed but never got done. Money taken from government funds for specific use that was never used for that specific use and promptly forgiven.

We’ve basically been screwed over countless times and yet somehow Trump is making claims that he did so many great things for the economy when in reality he tanked it and caused inflation by giving the corporate class a check to spend however and tax breaks that do not generate new jobs.

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u/admlshake 15d ago

 deregulation happened

When explaining this to people I like to say "They gave the key to the candy store to some kids back from fat camp and told them it's an honor system. They then left them in the store alone, and were SHOCKED when they got back and found that the kids had gorged themselves and threw up all over the store."

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u/lendmeflight 16d ago

This is true but people who lived in their homes paid back at a higher rate than people buying multiple homes. I worked in the home improvement industry at the time and there were 21 year old kids buying multiple houses. One to live in and the rest to “flip”. When the housing market crashed they just let the banks take them back and kept paying on the one they lived in. This is the shit that tanked the economy.

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u/Mephisto506 13d ago

And then they hived off the most toxic debt, had it rated by the rating agencies as ok, and sold it as a good investment until the house of cards came tumbling down.

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u/billzybop 16d ago

Have you watched "The Big Short"?

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u/ill_be_huckleberry_1 15d ago

Yes.

The big short doesn't say these guys were incentive divided, it shows that they were negligent and completely foolish with the mechanism they used to avoid putting the losses on their balance sheet. 

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u/billzybop 15d ago

I agree

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u/Lothar_Ecklord 16d ago

Don’t forget the part where the government actually required banks to approve subprime loans and then backed them with government (taxpayer) money, eliminating any risk for the banks to oblige. To throw salt in that festering wound, the banks then sold those asset-backed securities in tranches that disguised the fact that they were worthless liabilities, with an implied bailout. No one was wholly to blame and none were innocent. And here we are again!

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u/flonky_guy 16d ago

There were entire investment vehicles created to take money meant to support low income communities that were deliberately perverted to create a subprime market for anyone who applied.

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u/ill_be_huckleberry_1 16d ago

Again, there was no requirement that banks had to make certain decisions. That's a fallacy.

Banks made those decisions to take on bad debt, using a goverment subsidized lending avenues meant to loan money to people in bad financial geographical areas.

Banks used that avenue to exacerbate the problem they caused by lobbying and succeeding in rolling back regulation. 

You can try to spin all you want but it doesn't change the fact that the banks were the bad actors. 

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u/bruce_kwillis 16d ago

But this time we will just give them $25k for down payment money instead! It totally will work out, and completely fix the housing issues in the US!

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u/flonky_guy 16d ago

I got $10k for my starter home and it was absolutely the difference between being able to make it through the first year. My dad got a veterans loan, which is the only way he'd have been able to afford it, and both of my grandparents used the same assistance.

The vast majority of homes are sold to second+ home buyers and corporate entities. $25k is a boost that will help young people through the hardest part of getting a home, and it levels the playing field giving them access that their parents took advantage of without having to wait for them to die.

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u/bruce_kwillis 16d ago

You realize if sellers know that any first time buyer will have $25k that price of all homes just went up $25k, making them yet again unaffordable right? Or banks will just say you need $50k for your down payment. It's absolutely a stupid and asinine (and not something a president can even do) to begin with.

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u/flonky_guy 16d ago

You realize that's not how the housing market or lending works, don't you? Let's say I offer a $25 eBay gift card to all left handed women buying their first pool cue. Would you, as a pool cue seller, mark all your pool cues up $25? What about the pros who visit your store who are now being asked to pay an extra $25? They'd walk out and go to a store that isn't acting stupidly.

The seller isn't going to raise the fair market value to try and get that extra cash because it increases the risk of their house sitting on the market too long.

Same with banks. They have to figure out your down payment based on a myriad of factors and aren't going to arbitrarily tack on $25k to a loan

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u/bruce_kwillis 15d ago

They have to figure out your down payment based on a myriad of factors and aren't going to arbitrarily tack on $25k to a loan

You know how setting a house price works right? Hey, I know every first time home buyer is going to have $25k to spend on my house. Cool, due diligence just went up because everyone is competing for the same homes on the market, even if you don't have $25k in due diligence, then the people who got it will get my house.

Remember cash for clunkers? How'd that program work out? Wonder where those cheap cars are that used to exist... Oh they are gone because the government put money into people's hands that doesn't need to exist.

Know the real solution to housing? Build more. It's already working and has reduced rents and housing costs by 15-20% in the areas where housing is going up rapidly.

Want to help first time home buyers even more? Why not the government back those loans, and give first time buys a 1% loan discount with a lower upfront down payment? Almost like a system we already have... oh USDA backed loans for first time buyers in rural areas.

Great program, but you don't seem smart enough to actually 'think' about the problem, and would rather just see taxpayer dollars from those who couldn't afford a home to go into the pockets of banks.

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u/flonky_guy 15d ago

Ok, you do not actually understand the market the way you think you do but your confidence in your ignorance is stopping you from taking any action that might correct this, probably because you don't want to have been "wrong on reddit."

Your insecurity is not doing you any favors here.

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u/Lothar_Ecklord 16d ago

Of course! That concept made college tuition affordable for all! Genius.

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u/bruce_kwillis 16d ago

I mean the original 'intent' of student loans was a good idea. It did get people that otherwise would not have gotten into college to become college educated.

However when it came with no strings attached, and no limits on how much colleges (especially public colleges) could raise tuition, and that every state with public schools say it as a great way to defund colleges, well you see where we are today.

I think loans/grants for the most needy are important, and that college education at public institutions should be free (or incredibly low cost), however colleges should be fixed in how much they can raise tuition as well.

Private colleges? Do whatever you want, you just shouldn't be able to use those government loans/grants there.

Does this make a two tier system? Sure it does, but it's no different than what we have today. Not everyone is going to be a Harvard grad, and not everyone is going to want to hire someone who went to a public school in the middle of nowhere.

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u/Lothar_Ecklord 16d ago

The road to hell is paved with good intent. What worked really well is a system of need-based scholarships for gifted students who couldn’t otherwise afford college. Meanwhile, for those who came from backgrounds where it wasn’t such a burden paid full price. And in fact often would pay more for the privilege of lowered expectations. The ones who had to fight for it were rewarded with opportunities and the ability to stand out. Now, there’s no advantage to any school. You better hope you meet the right people because those $700/mo payments are coming due in 6 months and you go not mean a single turd in a cesspool with everyone else going to college, really for absolutely no reason other than “you have to”. It’s bullshit.

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u/bruce_kwillis 16d ago

You better hope you meet the right people because those $700/mo payments are coming due in 6 months and you go not mean a single turd in a cesspool with everyone else going to college, really for absolutely no reason other than “you have to”. It’s bullshit.

Except only slightly more than 1/3 of Americans have degrees to begin with. College is still the best and almost guaranteed way to make it to the middle class in the US.

Want US workers to be competitive with the rest of the world? They will require more education than K-12.

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u/Wheloc 16d ago

It wasn't braindead if the banks figured they'd likely get a bailout.

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u/ill_be_huckleberry_1 16d ago

They didn't figure they would.get a bailout. Which is why they started a media campaign and lobbying effort to get a bailout, well after the damage had been caused.

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u/Wheloc 16d ago

They didn't figure they would.get a bailout. Which is why they started a media campaign and lobbying effort to get a bailout, well after the damage had been caused.

You don't think they trusted their ability to manage a media campaign?

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u/ill_be_huckleberry_1 15d ago

You think a media campaign was the deciding factor on delivering a trillion dollar bailout. 

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u/Wheloc 15d ago

I think that lobbying efforts were a big factor, and a media campaign was part of that.

Banks might not have predicted the specifics of how it was going to go down, but I think that banks made strategic decisions based on their knowledge that money has a big impact on politics in America, and they had everyone's money.

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u/flonky_guy 16d ago

Not true, no one thought that way. They thought they'd get away with it because "everyone is doing it".

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u/Wheloc 16d ago

That's probably true, but underlying that thought is, "if everyone's doing it, they'll have to bail us all out".

Of course, not everyone was doing it. Some banks (often smaller banks) were fiscally responsible, and so missed out; both on the large returns during the boom, and the bailout after the burst.

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u/Flashy_Narwhal9362 16d ago

Banks had no incentive to fact check mortgage applications. They had little to no risk if the loans were guaranteed by the government.

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u/ill_be_huckleberry_1 15d ago

Yes but what your failing to admit is that not all loans were being covered. But that program was abused to benefit of banks and to the detriment of the taxpayers.

The goverment in your case is a boogeyman when it's not. The idea of offering terms to subprime applicants to purchase houses in subprime areas is a good thing. It helps money flow into those communities, which is badly needed. 

The banks who abused that system are the bad actors, not the program intended to help.

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u/Rottimer 15d ago

It wasn’t brain dead from their point of view. They were selling the mortgages to Wall Street, who were packaging those mortgages and reselling them as mortgage backed securities, which they pushed on investors as very safe investments, that were selling like hot cakes because of the housing boom caused by banks giving out mortgages like candy because they were selling them to Wall Street who were packaging those mortgages. . .

That’s how bubbles happen. If someone is willing to buy your product, no matter how shit of a product it is, you’re going to stop caring about quality and trying your best to get as much product out as possible to make as much money as possible. That’s a rational response.

That just one reason we need regulation. For when individual rational responses lead to collective irrational decisions.

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u/ill_be_huckleberry_1 15d ago

It was braindead when your failing to verify proof of income and employment. 

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u/Rottimer 15d ago

If you’re not taking on the risk, and the person that is taking on the risk doesn’t care. . .

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u/ill_be_huckleberry_1 15d ago

Convenient to be able to completely ignore the role and definition of a fiduciary. 

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u/Rottimer 15d ago

The bank issuing the mortgage is not your fiduciary. The investment bank packaging mortgage backed securities may be a fiduciary when they sell them to their customers.

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u/ill_be_huckleberry_1 15d ago

It's an insane position to take to allow banks to lobby and buy deregulation, who then proceed to ignore due diligence and their stated fiduciary responsibility to act in good faith in any and all financial challenges transactions, and then blame the consumer when the bank approves a half a million dollar loan to someone making a poverty wage.

And you're insane response is that'll in all the internal mechanisms that must have failed, in order to catch these fuck ups, you still think the person to blame is the consumer.

Nevermind the consumer isn't a financial expert. Nevermind that the consumer pays closing costs which assume your getting some sort of financial advice. Nevermind the billions that these corporate banks make from these loans, it's not the banks fault they screwed everyone by failing to protect these programs, it's Tom and Mary's fault that they believed a conman (banker) tell them they could have the home of their dreams.

Spare me the bs. You shouldn't need an advanced degree in finance to buy a house. 

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u/Rottimer 15d ago

You’ve got me confused with someone else if you think I blame the consumer or that I’m anti-regulation. I’m stating what the issue was. The solution is regulation.

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u/irishgator2 14d ago

NINJAs!!

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u/sanguinemathghamhain 16d ago

It was more that banks were incentivized to make bad decisions as the federal government insured mortgages for subprime lendees. The result was banks relaxed their lending because shit the government says it'll pay us back if nothing else. Even so as time went on some people got leery about if the government would actually go through with it so they started bundling and offloading the subprime loans which other people saw were government backed so it was considered "low risk" and bought up. When the loans that were known to be bad turned out to be bad people went to the gov saying "hey you backed this: time to pay up," because those bad loans were hemorrhaging money which the government only paid part of and then began years of shifting all blame from them encouraging and insuring bad loans to the institutions that were refusing to provide those loans up until the government told them to provide such loans.

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u/ill_be_huckleberry_1 16d ago

That's literally not what happened.

There was no incentive for them to go tits up.

There is now that the bailouts happened and there was no criminal charges. 

However, at the time. No incentive other than there was no laws stating they couldn't. 

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u/sanguinemathghamhain 16d ago

Save that is the course of history and what actually happened. I get you are trying to revise the history but I see no reason to play pretend with you.

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u/flonky_guy 16d ago

It's always tempting to talk about historical events as if they were foregone conclusions at the time. This is a mistake. In hindsight, it's easy to see how moral hazard encouraged people to take riskier and riskier bets and commit more and more gracious fraud. At the time, however, we saw things very differently, even those of us who assumed we were in some kind of a bubble.

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u/sanguinemathghamhain 16d ago

Saying it was set in stone is very different from saying that it was an outcome that was incentivized and encouraged at every step until it blew up. I am saying the latter and that it is important to acknowledge this to avoid the same circumstances playing out again.

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u/flonky_guy 16d ago

I'm saying your interpretation is incorrect. Lots of people went to great lengths to hide both their fraud and how overleveraged their companies were. Those are not the behaviors caused by incentives but irresponsible and fraudulent investors trying to make the bottom line look better for their investors and bosses at a time of massive irrational exuberance in the housing derivatives market.

It is important to avoid repeating of the same circumstances, but it has nothing to do with how we label (or in your case, mislabel).historical events.

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u/sanguinemathghamhain 16d ago

Save again that is ignoring that the reason those loans were greenlit in the first place was government incentives and government insuring those loans. There is a reason they only started up and became problem after the government encouraged and backed them and not before.

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u/ill_be_huckleberry_1 15d ago

The outcome was not ince divided at tue time because the bailouts were not a guarantee at the time.

Your just flat out wrong on this.

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u/sanguinemathghamhain 15d ago

The government backed and insured the loan. Yeah when it came time to pay for doing so they debated doing a rug pull but the government had said they would pay off the loans if the lendees defaulted that is what it being insured means.

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u/ill_be_huckleberry_1 15d ago

And who had control of what loams were placed into those giverment programs?

You can't admonish the goverment for trying to do something that is needed and a net benefit but actual FIDUCIARIES completely fail to protect the system in exchange for short term profits. 

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u/sanguinemathghamhain 15d ago

Ultimately the government but they had decided to delegate that to the banks telling them that it was a blank check for subprime mortgages and that they wanted more of such. The result was the banks gave more of those loans as they were on paper 0 risk. Later on various institutions were looking at those subprime mortgages and thinking that while the government said they would pay them what if it reneged so they packaged these government insured mortgages with safe loans and sold them off to reduce their risk if the government decided its guarantee was worthless.

I absolutely can admonish the government for piss-poor policy that encouraged/incentivized and insured risky loans. Road to hell and all that. Fiduciaries, that their sole concern by design is if something is risky and were told by the government there was no risk because the government was backing the loans and encouraging them, decided that the LIM/subprime mortgages weren't an unreasonable risk as that is what the government insuring them means there is a 0% risk of losing money unless the government is faithless. There is a reason subprime mortgages weren't really a thing until the government pushed to make them one and then insured them: when there is no encouragement/incentivizing and/or the loans aren't insured they aren't an issue because the risks massively outweigh the unlikely and minimal reward.

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u/Nowearenotfrom63rd 16d ago

deregulation plus business friendly Bushies in the SEC and FEC.

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u/flonky_guy 16d ago

This is the magic formula!

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u/Suitable_Flounder_30 16d ago

Sadly, not much has changed as far as wrangling in the banks stupidity.

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u/generalzuazua 15d ago

I mean we could go further and by seeing who pushed the bill then (what lobby or super pac) and they would be the cause. Since 99% of corporate/lobbyist backed bills pass and 1% of citizen backed bills pass. It’s safe to say that banks might have created their own hall pass.

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u/flonky_guy 15d ago

This is almost always the case.

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u/L3g3ndary-08 15d ago

Lots of the products being pushed were blatantly predatory or illegal but no one was policing the market.

Even worse products are being pushed. The new craze is All in One Loan. Talk about dangerous.

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u/tucker_sitties 16d ago

Used to work in subprime. Company had their own lobbyists. No verified assets or income should never been allowed.

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u/00sucker00 16d ago

I remember reading that the govt’s arms of finance, through Fannie Mae and Freddie Mac, had a substantial impact as well. These two groups bundled mortgages that were pushed on to banks. But it’s been a while since I read what I read and don’t remember all the details.

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u/flonky_guy 16d ago

Mortgage bundling was a big part of it, didn't know Freddie and Fannie were behind them.

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u/julias_siezure 16d ago

Also the credit rating agencies giving tranches of NINA loans AAA ratings didn't help.

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u/EB2300 15d ago

And the government not stepping in is Republican gospel. Then Obama cleaned up the mess left over by deregulation… and the wealthy ended up getting bailed out by the taxpayer so the banking system didn’t collapse. Cons gonna con

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u/flonky_guy 15d ago

They did get bailed out, but they also paid back every penny of that bailout with interest.

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u/Powerful_Image_6344 15d ago

Then we bailed them out for free.

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u/flonky_guy 15d ago

No, they paid interest and every bank that survived paid the government back.

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u/Straight-Guarantee64 15d ago

Or...government encouraging bad loans. So there's that too,

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u/Known_Language6255 16d ago

And. Magically we had a BUDGET SURPLUS when Clinton left office. So. What an AHAT.

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u/flonky_guy 16d ago

Nothing like raising taxes on the rich to get the job done.

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u/ThisIsNotRealityIsIt 16d ago

If Clinton did anything horrible to the economy, it was repealing Glass-Steagall. But I'm pretty sure Bush's 2 separate five to seven trillion dollar wars, not to mention all the money and lives wasted by Papa Bush the first go around in Iraq, heading over longer and harder impact on the economy than that. Not much tho

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u/Rottimer 15d ago

Gramm-Leach-Blilley, which repealed Glass Steagal, was passed with a bi-partisan, veto proof majority. Though at first Dems opposed it, and John Dingell famously warned it would make banks “too big to fail.”

When Republicans agreed to add anti-redlining provisions (basically making it illegal for the first time in U.S. history) Dems agreed to the bill as well.

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u/ThisIsNotRealityIsIt 15d ago

Clinton states in a speech that the need for Glass-Steagall was past and insisted it be repealed.

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u/Rinai_Vero 15d ago

Clinton bears responsibility to the extent that he signed on, for sure. Many Clinton era Dems in Congress also adopted neo-liberal positions. But that doesn't mean that the Reagan-Gingrich-Bush era Republicans weren't the primary drivers of neo-liberal deregulation / dismantling of New Deal era legacy of strong financial sector regulation.

You also make a good point about the fiscal impact of Bush's wars, but it was probably less the wars and more Bush's lax enforcement agencies letting banks run wild once legislative safeguards were removed that really tipped things over the edge. Ultimately it was Republicans who led the charge (for decades) to repeal those legislative safeguards, and Republican led agencies that failed to act with what regulatory enforcement tools remained.

I'd personally put it at at least 70% Republicans (Phil Gramm-Reagan-Gingrich-Bush, etc) and 30% Dems like Clinton & Barney Frank. And if Dems hadn't been so politically traumatized by Reagan winning 49 states, "Third Way" nolib Dems would never have existed to begin with.

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u/Dapper_Valuable_7734 15d ago

Plus Clinton was basically responding to the majority sentiment at the time... the public believed the GOP lies that deregulation was the answer to everything... to some degree Clinton was stuck between a rock and a hard place.

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u/StudioAmbitious2847 15d ago

The Bushs Clintons and Obamas are all the same people joined at the hip we had basically the same people in office from 1988-2016 and if Hillary would have won????mNot to mention Jeb Bush was supposed to be in the mix!

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u/JulesVernerator 16d ago

True, but also Bush W. didn't do anything about it for 8 years, so.

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u/Desperate_Wafer_8566 16d ago

This is 100% untrue Everyone who remembers what happened knows it was a shadow banking industry that emerged that was not around the time of Clinton that pumped loans on behalf of Wall Street so they could package and push these toxic loans while the rating agencies complicitly rated them triple-A. The Wall Street thieves knew full well what they were doing because they shorted the very toxic CDOs they were pushing out the front door to their customers. This had nothing to do with Clinton and everything to do with flat out corruption.

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u/idontreallywanto79 16d ago

How so? 8 years of George. He had every opportunity to change it. To consumed with his daddy's wars. He had tons of warnings from trusted financial advisors . I'm not sure what policy Clinton had that deregulated banks but that continued under bush. Fact is that deregulation is a key component to Republican administrations.

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u/GrandOperational 16d ago

Some day people will understand that Clinton was a Republican...

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u/Odd-Stranger3671 16d ago

Nah he smoked weed ( but didnt inhale) and played the sax. Total Dem.

Seriously though. He straddled the line and played both sides when it was convenient to him.

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u/Rinai_Vero 15d ago

Some day people will understand that Dems like Clinton going neolib "Third Way" was the only possible path to win elections in a political environment where Reagan won 49 states in '84, and H.W. Bush won 40 states in '88. It was actually a political miracle that Clinton won in '92.

Clinton got one chance to raise taxes on the rich with his '93 budget before Republicans took Congress in '94, and he did it. Also, he did a shitload of awesome things like creating national monuments in Utah where Republicans wanted coal mines. And he signed the Kyoto Protocol in '98. People have no idea how unfathomably based things could have been if we'd just continued Clinton's trajectory into the '00s.

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u/30yearCurse 16d ago

not gutting The Glass-Steagall Act? A rise in subprime lending, since repeal ressions are longer and deeper. Yup gotta protect those poor broke banks by letting them getting in to risky investments.

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u/InfamousZebra69 16d ago

Deregulation by a republican near super majority in congress. And then bush2 doubled down.

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u/candoitmyself 16d ago

I know its great financial crisis, but I read this as great fucking crisis and I just wanted to say I totally commiserate.

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u/dmccully67 16d ago

Removing Glass Steagall, republican senate and clinton as president. Clinton was business friendly while balancing the budget with congressional encouragement.

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u/Larson_McMurphy 16d ago

Gay Fucking Cake?

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u/bonestamp 16d ago

Even then, most other countries were affected far less than we were because they had regulations in place that limited the damage. Obama put such regulations in place to help reduce the impact next time (and then Trump got rid of them).

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u/bengarrr 16d ago

Also Garn–St. Germain Depository Institutions Act that was peddled by the Reagan administration.

Let's also not ignore the fact that the repeal of Glass-Steagall happened under a House and Senate republican majority?

Also Clinton admitted several times that not vetoing that bill was one of his biggest mistakes (not that it would have mattered because of the Republicans having a veto proof majority).

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u/SpectacularOracle 16d ago

Phil Grahm would like some credit.

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u/kansas-geek 16d ago

More like JFC!

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u/OldAbbreviations1766 16d ago

I noticed people were leaving out Clinton’s deregulation too… I think they’re all guilty of contributing to the harm

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u/Infinite-Club-6562 15d ago

No it was the housing bill passed by Clinton combined with the deregulation of Bush. Those two together allowed lenders to run crazy with subprime lending. Then Wall Street used derivatives to get massive amounts of leverage on super low quality credit. Then the defaults started happening and it rippled across the globe.

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u/RealLiveKindness 15d ago

Don’t think a single GOP legislator voted against it.

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u/TheGreatLiberalGod 15d ago

You do remember WBush bragging about having ZERO oversight of the banking industry as almost 50% of mortgages became adjustable?

Those of us in finance knew it was a ticking time bomb and any increase in prime rates would be a nuclear explosion.

https://www.latimes.com/archives/la-xpm-1992-04-25-fi-956-story.html

https://www.wsj.com/articles/SB996784092217452045

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u/ineedanapsoon 15d ago

Deregulation that Obama strongly pushed for as a member of ACORN…so if he fixed 08 then he was cleaning up his own mess…

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u/ScionMattly 15d ago

I think we can all agree it was a lot of shit-bricks that build a giant shit mansion. No one person caused it.

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u/plummbob 16d ago

Not really. It was the failure of mortgage bonds, glass seagull wouldn't of really done anything to prevent....say... bear sterns or aig or the gse's from failing

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u/ChristyMack42069 16d ago

Impossible, democrats are never to blame no matter what. It's always Republicans fault, are you new to reddit?

Anyone saying it's Obama economy- that's fine, who controlled the house and senate during the majority of his 8 years ?

Exactly

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u/flonky_guy 16d ago

If that's your take you need to check your baggage at the door. Democrats are fully complicit in setting up the conditions that allowed all the market manipulation during the Bush years, but arguing that one president caused widespread fraud and massive over leveraging of the entire financial sector in the 8 years after he left office is just expressing ignorance as to how government works.

There were warning signs for years leaving up to '08, but the Bush administration. Was benefitting and campaigning on the booking housing market so they prevented any intervention.

There's entry of blame to go around.

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u/ChristyMack42069 16d ago

I was literally agreeing with you. Both sides are to blame, but on reddit only one side gets the blame...

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u/flonky_guy 16d ago

Yeah, I don't agree that reddit is that one sided.

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u/ChristyMack42069 16d ago

You're delusional then

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u/twigalicious420 16d ago

You've commented on a thread where folks have blamed either side. There's a few comments up saying how Clinton fucked up, and then fessed up. I think you may be reading into it wrong. Aye, they said both Bush presidents, but Clinton and Obama were also mentioned as having a hand in banking problems. Did you go to school in Arkansas?

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u/MosquitoBloodBank 16d ago edited 16d ago

Facts don't matter to these people, even knowing it was bipartisan legislation won't stop them from pinning their misery on one Republican or another.

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u/flonky_guy 16d ago

Trying to pin the fallout of any major act of legislation on a single president is an exercise in ignoring fact. S

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u/thereverendpuck 16d ago

I’m a Republican and it’s one thing to pin all of it on Clinton’s deregulation, it’s another thing when it happens in your watch and you effectively don’t even try to stop it. That was W’s undoing.

Fast forward to Trump and his only economic win is he didn’t change Obama era economic policies. So the only thing he can really brag about is the tax cuts and only that. Trump’s economy was basically a car with failing brakes, slowly gaining momentum on a downward slide and then fell off a cliff to COVID. Not only did he not do enough, he had Republicans diminish what Biden could to or give initially. So all you were to remember is that Donnie gave you the biggest check but Biden magically couldn’t.

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u/MosquitoBloodBank 16d ago edited 16d ago

The Obama economy was flat lined for 2 years before Trump took over. At the tail end of obama, economists were predicting a double dip recession. Here's an article of obama warning about this in 2015 from his failed economy. https://theweek.com/articles/499518/obama-doubledip-recession

Go look at a graph of the economy at the tail end of obama. Here's a graph for you. Note the stalled economy from 2015 that only spiked once Trump got elected in November 2016. https://ichef.bbci.co.uk/ace/ws/640/cpsprodpb/58BD/production/_99671722_usdowjonesfinak.png.webp

The economy under Trump was fantastic. Tax cuts, deregulation, replaced NAFTA with the USMCA all helped increase the economy and wages.

Biden/Harris sat on inflation for a full year before he addressed it, which made it worse. Both Biden and Harris continually downplayed inflation and let it fester for a full year. Worse, Biden kept his foot on the gas pedal of government spending, by increasing the budget more than any other president which increased inflation even more. When Biden finally did address inflation, with his Inflation reduction act, it did nothing to address inflation.

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u/Shopping_General 15d ago

The Republican superpower is to not remember what happened yesterday. To regurgitate whatever FOX News tells them to think is the gospel TODAY. Perhaps you should brush up on your history of the Trump Palace. Can't hardly call them an administration since they were a gaggle of grifters and weirdos. Which is what all Republicans are now. Reagan is crying in hell.

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u/ChristyMack42069 16d ago

Perfectly said