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Government Report Slams Wall St., Says Financial Crash Entirely Preventable

 
 
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The Financial Crisis Inquiry Commission, charged with investigating the causes of the 2008 financial crash, has concluded that the meltdown was entirely preventable. Or, could have been prevented if government regulations of the financial industry had not been thoroughly gutted. The New York Times got a preliminary look at the report, slated for official release Thursday:

The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.

The government commission that investigated the financial crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors, and risky bets on securities backed by the loans.

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The report will probably reignite debate over the outsize influence of Wall Street; it says that regulators “lacked the political will” to scrutinize and hold accountable the institutions they were supposed to oversee. The financial sector spent $2.7 billion on lobbying from 1999 to 2008, while individuals and committees affiliated with the industry made more than $1 billion in campaign contributions.

Don't worry, Republicans on the commission are trying to find ways to blame poor people instead: 

Of the 10 commission members, only the 6 appointed by Democrats endorsed the final report. Three Republican members have prepared a dissent; a fourth Republican, Peter J. Wallison, a former Treasury official and White House counsel to President Ronald Reagan, has written a dissent, calling government policies to promote homeownership the primary culprit for the crisis.

Read the story in the New York Times.

AlterNet / By Tana Ganeva

Posted at January 25, 2011, 12:16pm