By Ronald Reagan:
...You and I are told increasingly we have to choose between a left or right. Well I'd like to suggest there is no such thing as a left or right. There's only an up or down...
Indeed.
...Reagan was applauded for continuing to eliminate the Nixon-era price controls. These were blamed for constraining the free-market equilibrium that would have prevented inflation. Reagan further removed controls on oil and gas, cable television and long-distance phone service, as well as interstate bus service and ocean shipping.
Bank regulations were eased. In 1982, the Garn-St. Germain Depository Institutions Act was passed, which removed restrictions on loan-to-value ratios for Savings and Loan banks. Reagan's budget cut also reduced regulatory staff at the Federal Home Loan Bank Board. As a result, banks invested in risky real estate ventures (sound familiar?). Reagan's deregulation and budget cutting contributed to the Savings and Loan Crisis of 1989.
Import barriers were actually increased, as Reagan doubled the number of items that were subject to trade restraint from 12% in 1980 to 23% in 1988. Little was done in other regulations affecting health, safety, and the environment. In fact, although Reagan reduced regulations, it was at a slower pace than under Carter. (Source: William A. Niskanen, Reaganomics, The Concise Encyclopedia of Economics)....
1982 Ronald Reagan deregulated the Savings and Loan Industry.
...The Reckoning (click here)
As a result of these regulatory and legislative changes, the S&L industry experienced rapid growth. From 1982 to 1985, thrift industry assets grew 56 percent, more than twice the 24 percent rate observed at banks. This growth was fueled by an influx of deposits as zombie thrifts began paying higher and higher rates to attract funds. These zombies were engaging in a “go for broke” strategy of investing in riskier and riskier projects, hoping they would pay off in higher returns. If these returns didn’t materialize, then it was taxpayers who would ultimately foot the bill, since the zombies were already insolvent and the FSLIC’s resources were insufficient to cover losses.
Texas was the epicenter of the thrift industry meltdown. In 1988, the peak year for FSLIC-insured institutions’ failures, more than 40 percent of thrift failures (including assisted transactions) nationwide had occurred in Texas, although they soon spread to other parts of the nation. Emblematic of the excesses that took place, in 1987 the FSLIC decided it was cheaper to actually burn some unfinished condos that a bankrupt Texas S&L had financed rather than try to sell them (see Image 2)....
You want me to get into details? Corruption? OBVIOUS plans for sequestering wealth from the people of the USA? I'd be happy to if no one else wants to set the record straight about "Reaganomics."
