Its true that the government was the body that changed the financing laws to allow for the NINJA loans during the end of the Clinton era. The government decided that they wanted more people to own homes and changed the regulations so that banks could loan to less economically viable households. This is part of a trend that has been developing over the last half century with the advent of Freddy Mac and Fanny May. These regulations worked to protect borrowers pretty well for the most part. The mixture of speculation in the real estate market brought on in part by the government’s lessening loan regulations, the bank’s predatory loaning policies and their ability to pass on bad debts unchecked broke the damn. This is a system that worked in concert to create the cacophony that we are witnessing.

This is why I disagree with your bifurcating Government and Business into two totally separate entities. Business and Government are intertwined. There are many reasons for this. One of the reasons for this is that money and power gravitate towards each other. This is because the top policy makers and enforcers were once top earners and once out of office will go back to the top of the food chain in the business world. They create legislation that is supposed to protect the public but then riddle it with loop holes to protect the banks. They set up regulatory agencies that fail to regulate. These agencies are headed by the same people who work in the industries they are trying to regulate. The reason for this is that these positions require expertise of understanding the industry they want to regulate. This is needed because you want to regulate fairly and not unnecessarily incumber business with regulation.

This complex interweaving of interests and organization was always a delicate balance who’s lines were easily blurred. The bank bail out has only exacerbated this problem as government and business have become dangerously intertwined.

I think that president Obama needs to admit that there is a serious problem and work towards creating a new equilibrium. It may win him some points from the electorate to get back money from the banks but my gut tells me that this money will be spent in some other way by the government or will be re-given to the banks in some sort of tax break or another benefits package. So we might be back to the politics as usual but the loser is the American Republic.

This isn’t great pay to be the leaders of the free world. It’s ok but try putting kids through college these amounts. Senators work long hard hours and have to be on the job much more than Congressmen. True there are perks but it’s just not a lot of money.
“Once the government sets in new regulations which will protect the lender, the banks will begin lending out money again to riskier applicants.” The truth is that the government tried this in the early 1990′s to keep the riskier borrowers out but then advocacy groups came in and demanded , rightfully so, more available capital for low income and higher risk borrowers. Ultimately we saw the banks lending to individuals who could not afford the financial burden of debt. Risky loans will always be with us. Banks will always s be picky. Under the current conditions, since it is hard to tell in which direction the economy is going, neither banks nor private equity are interested in funding anything other than solid blue chip ventures with big names from industry with proven financial track records. BG

He is still too inexperienced to actually, ‘be the President’, and pull the trigger on anything by making a decision. For instance, as chief executive, Mr. Obama can declare a state of emergency, now that 30 million Americans are out of work and the economy is completely stagnant. Banks are not lending to private individuals or businesses and even private equity money is very scarce. A simple .05% federal sales tax
( one half of one percent) on every transaction in the USA ( no exceptions, food, gas, medical everything- if money changes hands, .05% goes into the USA ) would fill the government coffers, end the budget crisis, instill confidence and get the country moving in the right direction. In two or three months,the president could repeal the tax as quickly as he enacted it and we could all move ahead with our lives. Of course, then we will have to deal with the inflation that is definitely on the horizon. ~A