27 Years

27 years ago, Ronald Reagan became President.

27 years ago is when the Reagan Administration began to push to dismantle as many of the regulations on banking and financial services that were put into place following the stock market crash and bank failures of the Great Depression.

For the last 27 years, Republican presidents, senators and congressmen (and pseudo-Republicans, Bill Clinton for one) worked to strip every bit of regulation that they could from the financial sector.

For the last 27 years, the Republican mantra has been to "let the markets function," that "we learned our lesson in the Depression, the banking industry would never do anything so foolish."

27 years of "trust us, we have high ethics" and "we have a fiduciary duty."

27 years of that line of crap.

Is there a single person in this country who is not now glad that the plan of the Bush Administration to turn Social Security over to Wall Street died on the table?

Right now, the financial sector is melting down, and it is happening because for the last 27 years, the Republicans did everything they could to gut the regulators.

27 years ago, if you wanted a mortgage, you got a fixed rate mortgage and you had to pay a 20% down payment. 27 years ago, you had to have the income to justify the mortgage payments. 27 years ago, you dealt with the same bank you got the loan from.

That was 27 years ago. Now, the entire financial system is resting on a bed of quicksand. Questionable mortgages were sold by the originating banks to other institutions, which then bundled them into securities and sold them. Those securities were insured and swapped around.

In 27 years, the financial system went from loans based on real things and securities that were founded on tangible things, to loans that are a gigantic interlocking house of cards. Now we have huge financial companies that have tens of billions of dollars in assets that are, at their core, nothing more than worthless paper.

AIG Insurance has failed. An insurance company that was once worth almost a hundred billion dollars has gone down the tubes. The Feds will prop up the shell, to the cost of tens of billions of our money. AIG failed because they got into the business of insuring those worthless piles of junk securities, securities that were so convoluted that nobody really knew what they were truly worth.

The FDIC's insurance fund is running out of money, too.

(Might I also point out that besides spending now hundreds of billions of dollars bailing out Wall Street's greed hangover, we are still spending north of ten billion a month on the failed wars of the Chimpeor? George Bush may leave office having doubled the Federal budget deficit.)

This financial disaster has been 27 years in the making. This financial disaster, which is by no means over, has occurred because Republicans allowed unchecked greed to rule the day in the financial services sector. The Republicans allowed, nay, encouraged, the creation of an unregulated shadow banking system. That system was, at its core, a massive Ponzi scheme.

We are living through the collapse of a Republican pyramid scheme, created in no small measure by ardent foes of regulation, such as Senators John S. McCain and Philip ("Nation of Whiners") Gramm. Republican de-regulation removed the banks themselves from tough oversight while allowing the banks to engage in usurious practices. Federal regulation of banks was, at the same time, limited to little more than signing off on new bank branches.

None of this had to happen. But it is happening because Republicans hate regulation, hate government, and to boot, are completely blind to the wholly foreseeable outcome when greed rules the roost.

For 27 years the Republicans have had their way and they have managed to set the stage to bring about another depression. We may yet avoid that, but it will cost the Treasury hundreds of billions of dollars of extra deficit spending, which has to be financed by more borrowing. Which may, in turn, set the stage for a truly horrific collapse. Not of a few banks, not of a large brokerage house or an insurance company, but of our economy.

And if that happens, the next depression, just like the last one, will have been brought to you by the Republican Party. The economies of many nations, not just ours, will crumble. Anybody who does not think that would give rise to any number of fascist or totalitarian states is deluding themselves. It has happened before.

It didn't have to happen this way. 27 years ago, it would not have happened this way. The economy wasn't in great shape 27 years ago, but we were not teetering on the edge of a global financial meltdown. Not in the way we are tonight, as I hammer out this post.

27 years of Republican blindness brought this about. 27 years, by the way, is about as long as it took for the stock market to recover from the last time the Republicans closed their eyes to risky behavior by financial institutions.

It should also be at least another 27 years before we let the Republicans anywhere near the helm of the Ship of State.