It’s the Report EVERY Member of Congress Should Read |
Monday, 01 February 2010 06:14 |
Warning Signs are There for Another Economic Catastrophe
“While members of Congress pontificating on Sunday Shows like to say that tax cuts and Wall Street led to our financial meltdown, they continue to ignore the role that politics and government played in creating the housing bubble that paved the way for our economic collapse,” Issa said. “The SIGTARP report is very clear, unless the Congress takes a detour from their current path – another and much deeper financial meltdown is inevitable.” In July of last year, Ranking Member Issa released a report detailing the role that the government’s ‘affordable housing policies’ played in creating the global financial crisis. According to the report , government intervention “created ‘affordable’ but dangerous lending policies which encouraged lower down payments, looser underwriting standards and higher leverage. Finally, government intervention created a nexus of vested interests – politicians, lenders and lobbyists – that profited from the ‘affordable’ housing market and acted to kill reforms. In the short run, this government intervention was successful in its stated goal – raising the national homeownership rate.” Issa added, “These are smoking gun reports that highlight the perils in continuing the bailout first mentality that has continued to leave us vulnerable to repeat the cycle that led to the financial meltdown. Congress and the Administration need to act thoughtfully, deliberately and honestly to stave off another collapse.” Key Facts and Conclusions from the Issa’s report included:Key Facts and Conclusions from the Issa’s report included:
The SIGTARP report also detailed how the Treasury Department continues to stonewall “one of SIGTARP’s most important recommendations” – the implementation of “strict information barriers or ‘walls’ between the PPIF managers making investment decisions on behalf of the PPIF and those employees of the fund management company who manage non-PPIF funds trading in the same kinds of securities.” As the report says, “for various reasons, Treasury has decided that requiring such walls ‘is simply not practical in the context of PPIP,’ and has refused to adopt this recommendation. “It is disappointing but not unsurprising that the Treasury Department under the leadership of Secretary Geithner is once again stonewalling transparency,” Issa said. “Frankly, just because it may be inconvenient is not a good enough excuse to justify leaving taxpayer dollars vulnerable to manipulation and fraud. It’s downright deceptive for this Administration to talk about accountability and transparency while refusing to impose conflict-of-interest barriers recommended by the SIGTARP.”
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