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CellistDouble3772 t1_j65bofh wrote

Reply to comment by grahag in How life with UBI could look like by Financial_Donut_64

I agree that the 2008 crisis was exacerbated by deregulation. But that wasn't the cause. The cause was bad government policy that allowed people to get loans that they couldn't afford.

And I don't disagree that people are suffering. It sucks. But it's because the government has acted irresponsibly and frankly, stupid, on many levels. And enacting prices controls as a way to band aid over their own mistakes will create short term relief. So maybe that is the way to go. But don't think for a second that there won't be consequences down the line.

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grahag t1_j65puy7 wrote

> The cause was bad government policy that allowed people to get loans that they couldn't afford.

Incorrect. The cause was financial institutions giving loans to people they KNEW would end up defaulting.

It was made possible by deregulation, but it wasn't the government who actually made it happen. You COULD say that the government LET it happen, but it was really an inside job.

Those financial institutions were the cause and some of them are no longer around because of it. Frankly, we should have taken them over and made them a government institution for the good of the people. And that really SHOULD be the penalty for ANY company that betrays the public trust. Especially when the failure of it will cause widespread financial calamity.

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CellistDouble3772 t1_j6631dt wrote

The government made possible and even incentived those institutions to give those bad loans. The institutions aren't free of blame, but the government was the enabler.

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grahag t1_j66tata wrote

That's like saying that the criminal isn't fully to blame for committing a crime that the government made so easy to do.

C'mon, you HAVE to see that, right?

And you're acting like banks didn't have control of legislation to deregulate themselves. Phil Gramm, a Republican Texas senator, AND Bill Clinton, were largely responsible for getting Glass-Steagall repealed and later deregulating derivatives. Gramm is now towards the top of UBS now, benefiting from that deregulation.

This wasn't "the government". This was the banking industry who as a whole, spent money for lobbying to get the industry deregulated. The government was a tool to do that and the banking industry was largely responsible for it.

I, as well about a hundred million others were directly affected, either losing their homes, their 401k's dropping half their value, or other financial disasters that left us all worse off than when 2008 hit. This orchestrated event was a culmination of decades of planning by the financial industry and rests solidly on their shoulders.

I'm aware the government is broken in a way that can't be easily fixed, but I'll never forget the details of my financial ruin or the people responsible.

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