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Planning to get married in Goa? www.weddingsetcgoa.com Making your 'dream wedding' possible ------------------------------------------------------------------------ Date: Tue, 6 Oct 2009 19:02:14 -0700 (PDT) From: Mervyn Lobo <[email protected]> If you watch the documentary, Michael Moore keeps informing the viewer that regulations that were put in place after the great depression were removed?because of?pressure/greed from the banking lobbies. Mario responds: As with every documentary made by millionaire capitalist Michael Moore, who pretends to be a socialist for business reasons, the information is either completely distorted or outright false. Mervyn's comments display his typical woeful misunderstanding of the facts regarding the regulation of financial institutions in the US because he has it exactly backwards. It was government regulations that caused the problems. To begin with, the only regulations that were removed in the US were those that restricted the kinds of financial businesses that banks and financial institutions could engage in. There were no changes in the regulations overseeing the day-to-day operations of these institutions as Mervyn falsely insinuates. If government regulations are the solution to economic problems among financial institutions, then why did the financial institutions in far more heavily regulated countries in Europe also suffer economic collapses? In fact it was government regulations that were imposed under the Community Reinvestment Act that forced the financial institutions in the US, especially the big, most politically prominent institutions, to lend money to low-income borrowers who were credit risks that eventually led to the current financial crisis. Under Bill Clinton they were threatened with lawsuits if they did not increase such lending. The objective was social engineering - helping poor people to own their own homes. The unintended consequences were the same as under any such socialist-style program - failure. The US banking system was doing fine until these regulations were imposed by the government. The many smaller banks that resisted lending money to risky borrowers never had problems and are still doing fine.
