FINANCIAL REFORM NEEDS TO ADDRESS BUBBLE-MAKING, NOT LOSSES

The recession which began in 2008 is NOT the core financial problem we face.

The core problem is the BUBBLE which inevitably led to the CORRECTION.

YES: The recession is not the disease; it's the medicine.

We need to end ONCE AND FOR ALL every federal and state program which inflates BUBBLES.

The Great Recession was the result of 30 years of liberal housing policy which FORCED banks to make BAD LOANS to people with bad credit so they could buy homes.

These bad loans INFLATED the price of homes and INFECTED the entire global financial system.

FANNIE MAE and FREDDIE MAC made trillions in bad loans over these 30 years and then repackaged them as derivatives which had the implicit guarantee of the USG ; (YES: Despite the public and repeated disavowals by Barney Frank - well before the collapse - that FANNIE MAE and FREDDIE MAC were, as GSE's, essentially government guaranteed enterprises. History proves Frank was wrong!).

These TRILLION$$ of bad loans were reprocessed into other derivatives and swaps which further "OPACIFIED" the underlying value - an effect also directly tied to the fact that those who bought and traded these derivatives felt the USG woulds back them up. (IN THE END, THE WERE RIGHT!)

If we want to prevent another bubble we have to stop inflating the housing markets, close FANNIE MAE and FREDDIE MAC, and let big banks fail.

The shareholders of big banks have an interest in how well the companies they own are run, but taxpayers do not, and the taxpayers should not be on the hook for the decisions - good or bad - that private financial companies make.