Following the Democrat Party’s drubbing in the mid-term elections, inquiring minds are reading the comments of outspoken former regulator Bill Black as he takes aim at Barack Obama’s “disastrous” response to the financial crisis.
Mr. Black is one of the few figures, if not the only one, on the national stage who is consistent in argument regardless of who the subject his admonishment is :
In a last campaign pitch to voters, US President Barack Obama justified his response to the Great Recession by contrasting it to “S&L”, a 1980s and early 1990s crisis which saw nearly 800 savings and loans institutions go bust amid a disastrous commercial real estate bubble.
Yet for Bill Black – a former Federal Home Loan Bank Board litigation director who as deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement contributed to a major 1993 report on S&L – it’s an analogy which sticks in the throat.
“It’s a terrible comparison,” says Black.
In his reasoning, Obama noted that while George Bush Senior’s efforts to stabilise the financial system cost two and a half per cent of gross domestic product (or $125m), his own administration’s actions have cost as little as one per cent.
“In the savings and loans crisis, for 2.5 per cent of GDP we actually resolved the problem,” Black guffaws. “In this case, they have resolved none of the problems.”
The rest of the article is more than worth the investment of time required to read it.
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