Why the Push For Deregulation?

Finance > Government

Stewart Brand

Alan Greenspan's deregulatory views and thoughts regarding the Federal Reserve (purpose = provide investor confidence in the Stock Market)

Liberating capital in the form of a Defined Contribution Pensions

Felix Rohatyn and MAC saving NYC in 1975

Credit Default Swaps on Mortgage-Backed Securities

Speculation. Eliminates the fear of loss and promotes greater wealth distribution

Sociopolitical Tension

Kent State Shootings (May 4th, 1970)

Hard Hat Riot (May 8th, 1970)

American Federation of Labour/CIO loss of faith in the Liberals, shifting towards more conservative ideologies because of anti-communist views and support for Nixon's Vietnam Policy

Students taking part in a larger demonstration in a government who was no longer representing their values. Protesting the Cambodia expansion and Vietnam War

200 Construction Workers vs Students

John Lindsay (Republican 1966-1970)

Criticized the National Guard and police's lack of action during the Kent State Shootings

1966 = USTA went on Strike

1968 = UFT went on Strike.

February 10th, 1969 snowstorm. The Upper East side was primarily getting their snow cleared relative to the rest of NYC.

Sanitation strike in summer 1968

George Meany and Peter Brennan

Federal Housing Administration created by the National Housing Act (1934). Also provided banks with some insurance, forcing people unable to provide down payments to pay mortgage insurance to banks by means of reducing risk for the banks. Encouraged them to hand out mortgages, eventually helps launch mass home ownership. Fannie Mae (1938-1968) government-backed, sold MBS from commercial banks to investment banks

Allowed banks to sell the mortgages they were issuing and thus removing the debt from their books. This allowed them to go and lend more money by issuing more mortgages

Only bought mortgages that met the criteria

Lyndon B. Johnson (1963-1969)

Privatizes Fannie Mae (Federal National Mortgage Association) by means of reducing the federal debt incurred from the $ spent on domestic social programs associated with The Great Society (goal of eliminating poverty and social injustice), Vietnam War

Created Freddie Mac (Federal Home Loan Mortgage Corporation) so that Fannie didn't remain a government monopoly.

1968 = Ginnie Mae (Government National Mortgage Association) created for veterans

People who don't meet the strict criteria laid out by the FHA can now buy mortgages. Expands the Secondary Mortgage Market, creates a greater incentive for banks to issue as many mortgages as possible due to more demand and less oversight. Also, mortgage issuers can now sell to either Fannie OR Freddie.

After Nixon and Carter said no to Wall Street regarding their involvement in secondary mortgage market, REGAN passes The Secondary Mortgage Market Enhancement Act (1984)

Allows Wall Street banks to securitize and sell mortgages

Now the race is really on to issue as many mortgages as possible. Now there is an endless amount of demand from Wall Street

Causes commercial banks to not do due diligence, since all their money will be coming from Wall Street

Low Interest Rates. Less Mortgages. Less money for banks to collect. What do they do? Turn to Wall Street

The New Left (1964 Cal Berkley): "Bodies Upon the Gears"

Protesting the military-industrial complex

Whole Earth Catalogue (1968), Time Magazine: We Owe It All To The Hippies (1995)

Believed that tech could aid these Hippies in their efforts of breaking free from society, capable of producing a self-sustaining society.

Helped the public overcome its fear of technology being an oppressor. Instead, Tech is a liberator of the individual

Technology creates freedom. Once people have freedom, authoritarianism will come to an end

Demanding deregulation for the greater good of society, allowing for a more communal world facilitated by technology. THIS HAD PUBLIC SUPPORT

UNABLE TO DEAL WITH NYC CRISIS