|
Services |
|
Categories - Copywriting - Shopping - Free Online Business Help - Telecommunications Services Articles: Finance - The Cause of the Financial Meltdown Many people don’t realize that the current banking meltdown actually started when the Fed pressured Congress to pass the Telecom Deregulation Act in 1996. The act wasn't really deregulation in that it left the telephone companies regulated to their rates and service areas while forcing them to give up their private property for less than market value to anyone that wanted to be a service provider. This was government theft. What The telecom Deregulation Act did do is create a boom and the resulting need for massive amounts of money that the banks and the Fed were only too happy to provide at low interest rates. Banks and venture capitalists entered into a feeding frenzy where they battled with each other to be the one allowed to throw money at anyone with a bad idea, no experience in the telecom industry, and, in many cases, not even a business plan.
When they took a breath and realized what they had done, they got out faster than they got in and the bubble popped in 2000. Trillions of dollars were lost. Seeing this, before the shrouds hit the floor, the Fed lowered interest rates, created more money, and a building boom started as people were losing their jobs.
This new bubble became the only thing that was sustaining the economy. Over the next years, up to this point, this new bubble that was even more fragile than the .com bubble because it was not in any way supported by demand, has been sustained by more legislation and more borrowing and money creation.
When Congress mandated that banks issue loans in rural, ethnic, less prosperous, and under served areas, they handed them the nail for the coffin. As banks were forced to become more and more creative in order to issue loans to people who they knew couldn't afford them, the coffin was nailed shut.
Many people are calling for more regulation when government meddling in and regulation of private industry is what caused the problem in the first place.
Whenever the Fed and the rest of the banking industry visits Congress and says that Congress should do something to help an industry or in the interest of the economy, the first thing that Congress should ask themselves is, how will these bankers make money if we do this?
Congress and Senate members have to realize that they collectively and intentionally, are not oilmen, energy experts, bankers, car builders, road builders, educators, telephone men, builders, environmentalists, truck drivers, warriors, or anything other than law makers who are supposed to only pass laws that protect the rights and property of the Citizens that they represent. They are not supposed to try to run industries that they know nothing about and they are not supposed to collect money that allows them to do this.
Many industries, including the once solid airline industry have been destroyed by the government’s failure to realize this.
All of our current problems can be traced to Congress, the Senate, and the President compounding regulation upon regulation that has only served only to destroy industry and cause millions of Americans to suffer.
|
