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Politics : American Presidential Politics and foreign affairs
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To: DuckTapeSunroof who wrote (40050)12/30/2009 8:00:24 PM
From: TimF  Read Replies (1) of 71588
 

A claim I've heard before (but ever without any quantifying evidence to support it).

The blog post I quoted and linked to had some details, is that discussion of the problem actually serious evidence? Well probably not, but it is as close as anything you've posted supporting your contentions on this subject. If your going to apply such a burden of proof you have to apply it to yourself as well.

And would it have self-healed with Volker's much HIGHER INTEREST RATES in '80, '81?)

The higher interest rates bought down the inflation, but in direct terms, would have increased the problem if it was not for at least the earliest part of the deregulation, that of allowing the S&LS to give out higher interest rates. If rates go up, but the S&Ls are still limited in their payouts, then they can't give depositors, enough to get or keep them.

However that fact set might be developed, it REMAINS TRUE that (PRIOR to the Congress & WH's rule-changing) the industry was SAFE

If a bank or S&L loses its depositor base than it isn't safe, it will either collapse quickly or waste away slowly depending on the details of the situation.

I do agree with you that the later reforms increased the risk to tax payers. They allowed the S&Ls to grow and thus made their failure bigger. And the increase in the amount covered by deposit insurance, more directly made the bailout bigger.
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