[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/12/01/art.foreclosure.a.gi.jpg caption="The government was warned of financial crisis and mortgage meltdown years before it happened."]
FROM CNN's Jack Cafferty:
It's official. We're in a recession, and we have been in one since December of last year according to the National Bureau of Economic Research. That's their job. They tell us when we're in a recession. Any American could have told you we've been in a recession for the past year, but the government agency that's supposed to tell us these things just got around to it today.
The government is great. According to a new analysis of documents conducted by the Associated Press, the government was warned of the coming financial crisis and mortgage meltdown years before it happened. But the Bush administration ignored the warnings under aggressive lobbying and promises of stability from some of same financial institutions that ultimately failed.
"Expect fallout, expect foreclosures, expect horror stories," one California mortgage lender wrote to U.S. regulators in January 2006. Some bank regulators proposed capping risky mortgages and providing clearer explanations of what mortgage-backed securities are. But regulators delayed putting new rules in place for the mortgage industry until later that year. By then it was too late. The meltdown was well underway.
The Bush administration has always been about trusting market forces and avoiding government intervention in the economy. The Associated Press points out that that philosophy "ironically has ushered in the most massive government intervention since the 1930s."
Here’s my question to you: What does it mean that the White House and Congress failed to act earlier on warnings about the mortgage meltdown?
Interested to know which ones made it on air?
Mike writes:
The failure on the part of Congress and the White House to act in the best interest of the American public demonstrates that they are not our representatives, but are instead beholden to a set of interests other than their voting constituents.
Marshall writes:
Your assumption that the White House failed to act on the crisis warnings does not hold up to scrutiny. There are plenty of video clips of Congressional hearings during which John McCain and others asked Congress to act on the impending mortgage crisis. To blame this on "Republicans" alone is as dishonest as your assumption is corrupt.
Rich from San Clemente, California writes:
It's the Bush administration's operating mode: put mine owners and lobbyists in charge of mine safety, put a college girl in charge of hiring at the Justice Department, put oil execs in charge of energy policy, put contractors in charge of contractor oversight. If Bush ever even cared enough to ask his Treasury guys and economic advisors whether or not things could get bad, he'd be getting answers from men who had made and were still making millions from the situation.
Michael from Canada writes:
Greenspan admitted publicly, government put too much trust in banks to regulate themselves. He thought banks and financial firms would have held themselves more accountable, which should have prevented over-leveraging assets. In this case, real estate. Greenspan, although he didn't come right out and say it, admitted that there should have been better regulation of the housing and financial markets.
M. writes:
This is an opportunity for the Republicans to loot the treasury and put an end to the new president's plans before they are even born.