The Diane Rehm Show

PART TWO

As for it being “too early to tell” about Obama - funny, you’ve done a very good job so far of condemning him almost constantly. (And please, don’t demean the Constitution by pretending your views have anything to do with it.)

“But for Fanny and Freddie, mortgage brokers, and yes, banks would never have had a place to dump their loans.”

Thanks for proving my point: Fanny and Freddie didn’t create those loans. Oh, and by the way, neither were all the loans “dumped” on Fanny and Freddie. (In fact, had that been true the mess could have been contained, and we could have just let the “macs” go bust.) In case you forgot, AIG wasn’t insuring Fanny and Freddie, but the private banks that were busy “swapping” their credit defaults.

“Repealing Glass-Steagall . . . made the mortgage market awash in money.”

Listen carefully. I'm only going to say this one time: BALONEY!. What that did was enable investment banks (which normally engage in stock and other riskier transactions, etc.) to enter the mortgage market without regulation. That’s why they were able to make such risky loans. In addition, the exception put into the Commodity Futures Trading Act (courtesy of Phil Gramm) left those “new” financial instruments (CDO’s and derivatives) completely unregulated. You keep ignoring those critical points

Which is why I can’t agree with your “solutions”. (Well, I agree with bringing back Glass-Steagall. But that doesn’t “protect depositors money”. The FDIC does that - another “big government” program I guess you’d want to do away with).

TO BE CONTINUED