The iconic Halloween monster is undying - whether it be demons, vampires, Michael Myers or Freddy Kruger. They keep coming back to do us harm.
And so it is with the policy of the modern far left - horrifying and undying. In this instance, the same policies that gave us the financial meltdown of 2008 are not merely alive and well, but being strengthened under Obama.
In 2008, I composed a long post, Hurricane Subprime, taking an in depth look at the causes of our economic meltdown. The "but for" cause of the Great Recession was social engineering that eviscerated color-blind credit rating standards. And as I pointed out when Dodd Frank was proposed, the Obama administration, rather than correcting this insanity, actually doubled down on it. Now this from Power Line:
The Obama administration is pressing ahead with its plan to impose racial quotas on the financial industry via the Dood-Frank law. Dodd-Frank requires agencies with financial sector regulatory responsibilities to “establish an Office of Minority and Women Inclusion” that will develop diversity and inclusion standards for workplaces and contracting.
Accordingly, these agencies have published in the Federal Register a proposed “Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies.” As Roger Clegg reports, that Statement, which applies not only to the agencies themselves but also to all those regulated by it, insists on the use of “metrics” and “percentage[s]“ to ensure compliance with the diversity requirement.
In other words it imposes quotas — quotas that will apply to hiring, promotion, and contracting.
There’s plenty of irony here; for it was the imposition of race-conscious lending practices on the banking industry that led to the financial crisis, that led to Dodd-Frank. . . .
This is horrendous. But as bad as it is, it is not the only devastating policy that gave us the melt-down - and which remains ensconced in our financial system. As I pointed out in Hurricane Subprime, the only unknown at the time was how the Credit Rating Bureaus played into all of this. They were supposed to be the backstop which would have prevented the financial crisis. But these agencies were wholly complicit in giving AAA ratings to subprime mortgage backed securities so that they could be traded throughout our financial system - many institutions by law can only purchase AAA rated securities. Clearly these rating agencies did not function as they should have. The "why" was finally answered in a superb article in Rolling Stone, The Last Mystery Of The Financial Crisis:
Thanks to a mountain of evidence gathered for a pair of major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.
In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
"Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more. . . .
Do read the whole article - it will leave you wanting to grab the pitchforks and torches. It should also be noted that Obama has not put a single one of these people in jail. Sure, there have been a few civil suits that have amounted to hitting up organizations for a bit of their pocket change. But countless people who committed outright fraud, albeit almost forced to by Barney Frank and the left, have skated because, to hold them accountable would require that the whole house of cards created by left be exposed.
It should also be noted from the article that a simple fix to this utterly broken credit rating system was actually proposed by Sen. Al Franken. It died - I hate to say this - in the Republican controlled House. It is just beyond belief.