fradulent
Fraud was illegal to the same extent that it was under Clinton, or will be under Obama
subprime loans to people who have sufficient income and credit to qualify for regular loans
Regulations limiting who you can make loans to, where not in effect under Clinton, and almost certainly will not be under Obama, and had Bush proposed and supported regulating such loans the proposals would have gone nowhere.
In any case such regulation is not a good idea, and almost certainly either will not happen or will be unnecessary when they do happen. In ordinary times, even more so in bubble times, the proposal would be attacked as limiting access to credit by the poor (and often as being racist because is has the net effect of reducing access to credit for minorities). In the times of bubble collapses, like the current situation, it will be unnecessary because lenders will already be tight with credit, and to the extent it makes them tighter it will be counterproductive.
Regulations like this imply the belief that the government can better determine who should get credit than lenders. That's a rather foolish belief. The reality is when the government tries to make such decisions it will be likely to be wrong, and even when its right, its only right for a moment, the regulations won't change as frequently as market conditions do, and even if they did there would be no guarantee that the change would be in the correct direction, as evidence by the fact that we did have regulations, laws, and political pressure about who should be lent to, but they went in the other direction, demanding an expansion of lending to people who are poor credit risks.
We also did have regulation limiting leverage, just not good regulation in that area. Its not lack of regulation but rather bad regulation.
As for regulations or laws against toxic substances in food, I support them, but we already had them, and they have nothing to do with the financial situation. |
