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