With Democrats STILL running against Bush and his policies, it's time for a sanity check. Got some questions for you.
Q1: Setting aside whatever you feel about Bush's policies (many Republicans and most conservatives never liked a lot of them either), what actual circumstance caused this economic collapse and is STILL a drag on the economy? Ans: all economists with half a brain have said it was/is, the glut of underqualified sub-prime mortgages.
Q2: But what about derivatives? After all, there was lots of talk about them as causing it and congress even passed legislation to fix this problem. Ans: Derivatives are NOT an investment; it is a means by which to package actual investments which was done with sub-prime mortgages. Derivatives are a way to sorta hide bad investments ... the underlying high-risk investments aren't as obvious and people who trade in derivatives have the warped view that packaging a whole lot of sub-prime mortgages together in a derivative somehow reduces the risk of all of them. These idiots think of it as some kind of insurance which IS a legitimate way to spread risk by packaging some risky things with a whole bunch of non-risky things. It's like health insurance which covers a large group of people. Sure, there are bad ones in the mix but the prevalence of healthy individuals helps spread the cost so unhealthy ones can afford to be sick. The sub-prime mortgages packaged as derivatives was a bad idea because ALL sub-prime mortgages are risky and there's very little about any part of them that's healthy. My point is this. If derivatives had not existed, the sub-prime mortgages would have still been there, just 'packaged' and invested some other way. If 'derivatives' had not existed at all, those sub-prime mortgages would STILL have collapsed the economy. It was the sub-prime mortgages, folks!
Q3: If the collapse was Bush's fault and, obviously, sub-prime mortgages caused it, what exactly were his policies that caused all those sub-prime mortgages? Ans: Actually you cannot name any because he had nothing to do with pushing these toxic investments and making the situation worse. None of his policies either created OR pushed sub-prime mortgages. It was mainly Democrats who pushed it, especially Frank and Dodd.
Q4: What things facilitated the proliferation of sub-prime mortgages? Ans: THE main thing by far was Fannie and Freddie policies which were pushed hard by Democrats, especially Frank and Dodd.
Q5: Why didn't congress see this train wreck coming and do something to stop it? Ans: Democrats were in charge of regulating this 'industry' for 1 1/2 years prior to the collapse. If ANY ONE GROUP can be held accountable, it HAS to be them. They had constitutional responsibility and authority to regulate Fannie and Freddie ... as well as the financial industry! IT WASN'T EVEN BUSH'S RESPONSIBILITY to regulate it! (News Flash: the constitution holds congress, NOT the president, responsible for regulating these things!) In fact, many economists and congressmen saw this coming. In fact, Bush tried to stop it and the Democratic congress stopped him. Considering the roots of all this goes back to Clinton's administration and Democrats pushed it and Democrats had the best view of this train coming for 1 1/2 years before it hit us, how is it that it's Bush's fault? It completely defies logic ... how people can believe the nonsense blame-placing by Democrats is mind-boggling. Just because Democrats say it all the time doesn't make it true! Gads people! We've turned off our brains and let them tell us what to believe whether it's true or not!
Q6: Why is it important to understand what ACTUALLY caused the collapse? Ans: because you can't fix what's broken unless you understand and address the ROOT cause. 'Fixing' derivatives, for example, did nothing. Even if they had 'fixed' derivatives well before the collapse, the collapse would have happened anyway! That's because the toxic investment that caused it would still have been there ... just 'packaged' and traded some other way!
Q7: Didn't Bush do anything to cause it or make it worse? Ans: Not to cause it but he had a hand it making it more difficult to recover from the collapse after Democrats caused it by authorizing excessive spending and increasing our debt. Bush did cause us a debt problem but that didn't 'cause' the collapse, just made it harder to recover. That's bad in itself, but, again, that did not cause the collapse. It's important to keep that in mind because we need to fix whatever caused this so it doesn't happen again.
Q8: But there are so many people saying it's Bush's fault. Ans: Consider this. If a Democrat had become president instead of Bush (ie, if Bush had NOT been president), the collapse would have happened anyway. Why? Because that's the party that caused this by pushing sub-prime mortgages to wayyyyyyy too many people who couldn't afford them. In fact, it's not unreasonable to say it could have been much worse under a Democratic president who most likely would have pushed them hard (while Bush did not).
Q9: Okay, sounds logical all things considered but why bother with that now? Ans: Because we still haven't fixed the root cause. The toxic sub-prime mortgages are STILL out there, dragging down our economy and risking a double-dip recession. Also, the Democratic congress has seen fit NOT to fix the problem with Fannie and Freddie policies ... in spite of Republican pressure to address those policies (even though reasonable economists all agreee that was indeed at the root of the collapse), Democrats have steadfastly avoided doing so. The reason we need to keep talking about this until we understand it well enough is, congress has NOT fixed the root problem even yet! Gads!
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