Why We're in this Mess

First, I'm not a highly educated person. I finished high school - barely - and can't do math without the use of my hands and my feet. But everyone needs to know that there is a reason we're in this financial and banking mess today: the repeal of the Glass-Steagall Act set the stage for what we're now witnessing. The Glass-Steagall Act of 1933 was enacted to prevent banks and investment companies from merging the money of their depositors and investors. This was done after the crash of 1929 in which bank after bank went belly up. We've all heard the stories, we all have read our history books. What we all have failed to do is correctly place the blame for what is turning out to be another turning point in our history.

Bill Clinton repealed the Glass-Steagall Act in 1999, thereby clearing the way for what would certainly become the mess we're in now. Congress further exacerbated this problem with they mandated that mortgage lenders make it easier for otherwise unqualified borrowers to borrow huge sums of money. Of course, our Congress is filled with activists, not financiers, and certainly not historians. When the Congress deemed that a family earning $40k a year could qualify for a $300k mortgage they did not foresee the natural greed that would follow. Home prices soared, following the money that was available. There was a ready food source, so to say, and the beast of greed could smell blood in the water. The sub-prime mortgage was born.

Like a drug pusher giving the potential addict a "taste", the lure of "the good life" was simply too much for some people to resist. They saw the big house, and the dream of showing off was reinforced by a lending system that had shortsightedly dreamed of the feast of foreclosure. Many people found themselves, sadly, with the realization that paying a $1000 a month for a mortgage left them little to no money to actually live life. The era of the McMansion had begun, with expensive homes on zero lot lines to spring up literally overnight. When they had to choose between feeding their families and feeding the bank, the family won.

We must place blame where it needs to be: Bill Clinton and the waste of taxpayer money Congress that was in place in 1999.