Financial Crisis Inquiry Report gets it right

 The  Financial Crisis Inquiry Report seems well researched and well written. Here. The economic crisis was caused by lax regulation and by greed.  This grand theft in the financial markets caused at least half of the current California  economic crisis.  If the Tea Baggers opposed the financial bail outs, I am waiting to see if they will support the arrest and prosecution of those who caused this crisis.  I haven’t seen support for prosecution  yet.

California is suffering a severe recession. We have 12.5 % unemployment. We need to build the promise of of California. 

  That promise is a good job for all and  the opportunity to have  a rewarding career. That is how people become tax payers.  The austerity paradigm  being promoted by the Republicans is the same policy that produced the economic crisis in the first place.  The tax and budget cut mania proposed by the governor  does not promote good jobs and a recovery.  It will make the recession worse.

 "From the Report : "While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubble—fueled by low interest rates, easy and available credit, scant regulation, and toxic mortgages— that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world. When the bubble burst, hun- dreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions that had significant exposures to those mortgages and had borrowed heavily against them. This happened not just in the United States but around the world. The losses were magnified by derivatives such as synthetic securities."

The crisis reached seismic proportions in September 2008 with the failure of Lehman Brothers and the impending collapse of the insurance giant American Interna- tional Group (AIG). Panic fanned by a lack of transparency of the balance sheets of ma- jor financial institutions, coupled with a tangle of interconnections among institutions perceived to be “too big to fail,” caused the credit markets to seize up. Trading ground to a halt. The stock market plummeted. The economy plunged into a deep recession.  

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