The other time conservative deregulation caused a disaster
Though deregulation, the conservative’s favorite tool for allowing the capitalist predators to screw the system, started before reagan, the republican, like the one who would follow him in 2001, made changes that opened the doors of the Treasury to the wolves.
The S&L Crisis: A Chrono-Bibliography
December, 1982—Garn - St Germain Depository Institutions Act of 1982 enacted. This Reagan Administration initiative is designed to complete the process of giving expanded powers to federally chartered S&Ls and enables them to diversify their activities with the view of increasing profits. Major provisions include: elimination of deposit interest rate ceilings; elimination of the previous statutory limit on loan to value ratio; and expansion of the asset powers of federal S&Ls by permitting up to 40% of assets in commercial mortgages, up to 30% of assets in consumer loans, up to 10% of assets in commercial loans, and up to 10% of assets in commercial leases.
And what was the result?
G.A.O. Puts Cost of S.& L. Bailout at Half a Trillion Dollars
The General Accounting Office today released the most comprehensive Government study so far on the costs of the savings and loan bailout, placing a total price tag on the debacle of nearly half a trillion dollars, including more than $130 billion from taxpayers.
The figures were roughly in line with previous estimates, and included both direct and indirect costs as well as interest payments that will stretch out for decades.
The money went to clean up the financial mess from the failure of more than 700 savings institutions in the 1980’s and early 1990’s as a result of mismanagement, fraud and an economic downturn in states like Texas and California.
“The bad news in this report is that the cost of the failure of many thrift institutions, with interest, approaches half a trillion dollars and that taxpayer accountability due to bonds issued will continue through the year 2030,” said Representative Jim Leach of Iowa, a Republican who is the chairman of the House Banking Committee.
Where was the epicenter of the crime? Republican Texas:
1987—Losses at Texas S&Ls comprise more than one-half of all S&L losses nationwide, and of the 20 largest losses, 14 are in Texas. Texas economy in major recession: crude oil prices fall by nearly 50%, office vacancy is over 30%, and real estate prices collapse.
Where were the tea parties then? How come we always have these bailouts of the rich financial sector when republicans rule?
