Baseman posted:There were some excesses! But there were also real risk to the system, some due to government policy!
You would not like to know what would have happened if the Govt did not intervene!
You statement reeks ignorance of the financial markets and interdependencies!
The "excesses" were not just in the banks. The advocates of subsidized housing who made the GSE's out to be criminals and fostered a culture that led to maids in California who were making $25K a year buying $900K homes (also an "excess") also had something to do with it. These folks, think then Congressman Barney Frank and his cohorts, were screaming about "fair housing", and unfair lending practices. The resulting lower lending standards and guarantees to banks (govt. being the backstop) in essence created the problem.
Banks are not stupid! They won't make loans to high risk individuals and jeopardize their system! The govt. , including Barney Frank and his buddies, gave the wink and nod. I recall several years before the crisis the then White House warned of "systemic risk" in the system. Frank and his buddies screamed about the white house destroying housing for the poor!
This is the history to the bailouts in 2008. And yes, Congress was a huge part of causing the crisis, not just the banks. Frank got off scot free, just like the bankers. Sits around pontificating now, talking shit, and collecting he pension. No penalty for him, just like no penalty for the bankers!