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Sunday, September 27, 2009

Devolve Regulation To The States

In our book, The Great Recession Conspiracy, we suggest that one of the steps that should be taken to ensure we do not repeat the Great Recession in the future is to remove bank regulation from Washington and transfer it to the state attorney generals.

Here is some very good evidence why this is an important action. Today's Washington Post carries a story headlined, "As Subprime Lending Crisis Unfolded, Watchdog Fed Didn't Bother Barking". One incident from the article is especially pointed. Beginning in 1999 (ten full years ago) a group of Chicago based community groups presented research to the Federal Reserve Bank that the high interest subprime loan originators were focused on black and Hispanic neighborhoods. They held those meetings THREE time a year and their complaints were dismissed out of hand every time.

We really need to get control of our lives away from Washington, a place where cutting self interest deals seems to be the only activity practiced. Read the rest of the article to watch indifference at work for a decade.

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