Be careful who we vote for
To the Editor:
Savings and Loan Collapse. The year 1982 marked the beginning of supply side economics in which deregulation and tax cuts were viewed as the solution to stimulating corporate growth.
The savings and loan industry was the first to experience this experiment. The Garn-St. Germain Depository Institutions Act deregulated loan-to-value ratios along with interest rate caps leading to an industry collapse between 1986 and 1995. The aftermath of the S&L crisis saw several executives imprisoned while more than 1,000 S&Ls failed, causing the recession of 1990–91.
The Dot-com Recession. March through December 2001. In 2000 the Fed and Taxpayer Relief Act reduced tax and interest rates making debt financing easier. Equity traders rushed to invest in a new industry. The infusion of cash was prompted by the creation of the world wide web and growing acceptance of the internet for online shopping and communication. Compounding the risk were start-up companies without business plans and models for running a business coupled with young entrepreneurs’ vision of unimagined wealth and no management experience. The Fed increased interest rates and the music stopped in March 2000.
The Great Recession. December 2007 to June 2009, more than 8 million jobs were lost and 1.8 million small businesses failed. The Gramm-Leach-Bliley Act of 1999 overturned legislation preventing banks from combining commercial and investment functions. The Federal Reserve lacked authority to prevent banks from giving mortgages to people who were bad credit risks. Additionally, lax mortgage requirements by the Department of Housing and Urban Development (HUD) targeted home mortgages to low-income borrowers leading to dishonest lending practices. Unregulated investment banks packaged these risky mortgages into mortgage-backed securities and marketed them to their clients. A downturn in the housing market caused mortgage-backed securities to lose value causing investment banks to lose value and the music stopped.
The Pandemic Recession. February to April 2020 was considered the shortest but deepest recession of this century. The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 reduced the number of banks subject to stronger federal oversight, removed limitations on hedge fund and private equity fund naming conventions, exempted most small banks from the Volcker Rule, reduced regulation and increased advantages for small- and medium-sized bank holding companies and custodial banks. According to abi.org the U.S. experienced 21,655 business bankruptcies and GDP shrank to -2.8%.
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These economic collapses were caused by deregulation. When WNC Congressman Chuck Edwards tells us the economy needs stimulating with reduced regulation and taxes, look out! He will drive us into another recession with lost jobs and broken families. Beware of state Sen. Kevin Corbin when he talks about cutting regulation. He just increased regulation on women’s rights. Replace Corbin with Adam Tebrugge to grow our economy in North Carolina. Vote for Caleb Rudrow, not Chuck Edwards, who is all over creating another recession. Neither of these Republicans have a clue about economic growth. Elect Democrats for a change!
Ron Robinson
Sylva
