Developer bailout bill offers a sordid case study

Republicans at the state and federal level have not exactly been sympathetic to the plight of millions of homeowners who are struggling to pay off mortgages on houses that may have lost 30 percent or more of their value. In general, They take the stern approach: If you borrowed the money, repay the money. If you can’t repay the money, too bad. Hit the street.

However, it’s downright amazing how quickly that tune can change when it’s rich people who might need help.

Consider Senate Bill 448, which passed the Georgia Senate earlier this year and is now making its way through the House. In the version passed by the Senate, it would give large real-estate developers a way to retroactively dump much of the debt that they have personally promised to repay to banks in the state. It’s a pretty astonishing little piece of legislation.

(The bill was introduced by Sen. Don Balfour, a Gwinnett Republican and the chairman of the powerful Senate Rules Committee. It’s certainly not hard to think of politically influential Gwinnett developers in a financial position to benefit a great deal from such a bailout.)

Here’s the situation: During the real-estate boom, large developers who were seeking loans for their companies often signed agreements in which they personally guaranteed repayment of the loan should the company default. Those companies have now defaulted or gone bankrupt, so banks are naturally turning to the developers for the money they are owed.

Of course, the banks themselves are having trouble as well — Georgia leads the nation in failed banks. So banks that have bad loans on their books will often sell those loans at a reduced price to a third-party collection agency. A million-dollar bad loan might get sold for $600,000, for example.

The bank gets the loan off its books and at least collects that $600,000, writing off $400,000 in losses. The risk is shifted to the new holder of the loan, who then attempts to collect as much as it can on the original $1 million debt from the borrower.

SB 448 — again, in its Senate version — would change all that. Suddenly, the third party that acquires the loan for $600,000 would be allowed to collect no more than $600,000, plus interest, from those who guaranteed it. If you happen to be that guarantor — congratulations! — the Georgia Legislature has just magically reduced your debt by $400,000 and maybe even more.

The problem, of course, is that suddenly the collection agency has little or no incentive to buy the risky loan, because the potential profit from collecting on the debt has vanished. That in turn means the bank can’t get the $600,000 it might need to keep its balance sheets healthy. And if the bank fails, taxpayers will be on the hook through the Federal Deposit Insurance Corporation.

The state banking community has rallied to fight the bill, pointing out that the state Legislature cannot and should not retroactively rewrite loan contracts. They also warn that if bankers lose the ability to seek full repayment from guarantors, it’s going to make it much harder to make such loans in the future, hurting the state’s economic recovery.

“If the Legislature can retroactively annul a guarantor’s promise to pay, then banks cannot make loans based on a borrower’s signature,” BankSouth CEO Harold Reynolds points out. “That is one of the surest means to restrict needed capital for small business. Certainly, you know of many businesses started in a garage with a signature loan from a community bank. What will the Legislature propose next to retroactively alter contractual arrangements to the determent of citizens and businesses of Georgia?”

As the AJC’s Scott Trubey reports, changes in the bill were made this week to “further narrow its scope, so it would not apply to student loans, credit cards or car loans that are sold on the secondary market.” In other words, the bill was tweaked to remove any chance that it might accidentally help the “little people,” rather than those it was designed to benefit. Further changes have also been made, although the latest amended version of the bill has not yet been posted on-line.

All in all, SB 448 is a pretty sordid case study in how things work in the Georgia Legislature.

– Jay Bookman

620 comments Add your comment

JOE COOL~DoWnToWn THUG

March 23rd, 2012
9:36 am

Stonethrower

March 23rd, 2012
9:39 am

If you help the big people then you are also helping the little people! Trickle down my friend. Developers are the job creators and we need all the help we can get. Yuck yuck.

n

March 23rd, 2012
9:40 am

Why do the citizens of Gwinnett Co. continue to elect this crook?

Steve

March 23rd, 2012
9:42 am

The Republicans are all for bailouts and welfare when it helps the wealthy. Typical.

JOE COOL~DoWnToWn THUG

March 23rd, 2012
9:43 am

What do you expect out of GA CONs……

Michael

March 23rd, 2012
9:44 am

Does anything they do suprise us anymore? Crook is the right word. Pay attention to see if your Representitive votes for this bill, and if so get him or her out of office.

ByteMe

March 23rd, 2012
9:45 am

I hope this is your Sunday column.

Steve - USA ("None of the Above")

March 23rd, 2012
9:45 am

This is what happens when you go down the road of not expecting people to honor their debts. If you owe it, you should pay it, whether you are a business or a person

ByteMe

March 23rd, 2012
9:45 am

Politicians are such sociopaths. The “shame” gene is completely missing from their genetic material.

ty webb

March 23rd, 2012
9:46 am

Now that was a good blog, Jay…I agree with you 100%.

ByteMe

March 23rd, 2012
9:46 am

Could this be a favor to a couple of seedy hotel owners/politicians who said that the bank should never have made that million-dollar loan to them?

Lord Help Us

March 23rd, 2012
9:48 am

I am sure the local tea parties are outraged…

Butch Cassidy

March 23rd, 2012
9:48 am

Wait…CHOICES, BOOTSTRAPS, PERSONAL RESPONSIBILITY, MOOCHERS, CLASS WARFARE, GUBMINT CHECK, OBOZA, OBLAH BLAH, OBAMA IS OVER, ROMNEY 2012, 47% PAY NOTHING, BILL MAHER, $4.00 FOAR A GALLON OF GAS, EPIC FAIL….. Did I miss anything in regards to builders getting bailouts? :)

Jay

March 23rd, 2012
9:49 am

Byte, it’s too long for the Sunday space, and it’s hard to explain in a shorter version.

Bill

March 23rd, 2012
9:49 am

“If you borrowed the money, repay the money. If you can’t repay the money, too bad. Hit the street.’

Jay, that’s a flat out lie and you know it. Why do spend so much of your time blaming one political party for things that have NOTHING to do with politics?

The GOP didn’t make people buy homes. The GOP didn’t make people purchase cars.

Geez, next you’ll be telling us it was the GOP that made taxpayers buy health insurance. Oh wait, that’s what Obama is doing.

Capitol Cricket

March 23rd, 2012
9:50 am

Could this be a favor to a couple of seedy hotel owners/politicians who said that the bank should never have made that million-dollar loan to them?

Down here under the Gold Dome, two names are being spoken openly when this bill is discussed. One is a Gwinnett developer who made a bunch of money on the Belt Line, and the other was once associated with a large apartment complex firm with great landscaping.

JohnnyReb

March 23rd, 2012
9:50 am

I am against the bill. If you make a personal guarantee, it is just that, a guarantee where you knowingly agree to put your personal worth on the line to guarantee a business loan. I have done it; have a loan and lease open now.

With the above stated, I find it not surprising, in fact expected, but very disappointing that Jay and his supporters oppose the proposed bill but heap praises on Obama for interferring with basically the same contract as to the auto bailout.

Steve - USA ("None of the Above")

March 23rd, 2012
9:51 am

I am sure that the developers didn’t provide any gifts or trips to get this bill so no need to bring up the lack of an ethics bill again.

getalife

March 23rd, 2012
9:52 am

And the broke cons will put on their pom poms and cheerleader outfits no matter what their failed party does.

ByteMe

March 23rd, 2012
9:52 am

Bummer, Jay. You should beg for more space or get the OpEd page editor to push the issue front and center.

ty webb

March 23rd, 2012
9:53 am

Johnny Reb,
That’s because the auto bailout favored democrat voters…this “bailout”(per se) favors likely republican voter.

Common Sense isn't very Common

March 23rd, 2012
9:53 am

I wonder if Balfour is really RB in blog form?

Mighty Righty

March 23rd, 2012
9:53 am

This has to be the first article ever written by a liberal colmnist favoring any help for banks. As far as retroactively changing the law, I don’t think the state of Georgia can do that. I believe, and all I know is what Jay is writting, that as Jay writes the law would apply to future transactions between a bank and a collection agency. The only case I have ever heard of is Obama with the compliance of the Democrat controlled congress retroactively cancelling debt of bond holders at GM and Chrysler and giving the assets which had previously secured the bond holder notes to the Obama and Democrat campaign donors United Auto Workers Union. Maybe Jay could put us on to a column he wrote at that time criticising Obama and the Democrats for thiat theft of stockholder funds.

ByteMe

March 23rd, 2012
9:53 am

Interesting, Cricket. I get the second reference (who doesn’t? :) ), but not the first one.

Jay

March 23rd, 2012
9:54 am

Steve, you mean the ethics bill trapped in the Senate Rules Committee … chaired by Don Balfour?

massachusetts refugee thug

March 23rd, 2012
9:54 am

we republicans are for limited government and personal responsibility…except when we’re not.

Granny Godzilla - Union Thugette

March 23rd, 2012
9:54 am

From Fox Business news

Americas Most Corrupt States

And guess what?

#1 Georgia
> Overall grade: F (49%)
> Public access to information: F
> Legislative accountability: F
> Political financing: F
> Ethics enforcement agencies: F

Georgia has the worst levels of corruption risk and lack of accountability of any state in the country. The state scored a D or worse in 12 of the 14 categories. The state’s biggest problem is the absence of a strong ethics enforcement agency. Republican governor Sonny Perdue managed to get an ethics bill through the legislature, but by the time it passed, his proposals to ban gifts to state workers and clearly define appropriate campaign spending had been stripped out. According to State Integrity reporter Jim Walls, while Georgia has provisions to prevent certain kinds of corruption in campaign finance and lobbying, the state is full of unaddressed loopholes and lax enforcement. “About 2,000 Georgia officials, including one in five sitting legislators, have failed to pay penalties for filing their disclosures late, or not at all.”

Capitol Cricket

March 23rd, 2012
9:57 am

I believe, and all I know is what Jay is writting, that as Jay writes the law would apply to future transactions between a bank and a collection agency.

That change was made in the House committee yesterday. The original Senate bill, as passed, is much broader.

Speculation is that it’s not actually intended to be enacted – the goal is to pass the bill, and give the two ‘financial sponsors’ leverage to negotiate a deal with their creditors before the Governor vetoes it.

It’s reprehensible. I hope the Georgia Bankers Association finds a primary challenge and a Dem opponent for Balfour to shower with love, affection, and contributions.

barking frog

March 23rd, 2012
9:57 am

Business as usual.

Butch Cassidy

March 23rd, 2012
9:57 am

ty webb – “That’s because the auto bailout favored democrat voters…this “bailout”(per se) favors likely republican voter.”

Actually, it’s because the Republicans are the ones who constantly soapbox about the evil bailouts under Obama and demand personal responsibility for everyone, but then seem perfectly fine doing the same thing. In other words, BUSINESS AS USUAL FROM BOTH THE LEFT AND THE RIGHT.

St Simons- island off the coast of New Somalia

March 23rd, 2012
9:59 am

corruption on a scale like I’ve never seen, and I’ve seen some s—
Remember the Georgia Republicans.
Remember these people, Georgia, & their Fellow Travelers

Jm

March 23rd, 2012
9:59 am

Jay is so crazy. But I absolutely agree.

In addition I need to add that GA republicans other than Sam Olens are pretty much dirtbags.

Oh, and while I’m at it, I was wrong about the next world bank president. Oh well.

Steve - USA ("None of the Above")

March 23rd, 2012
10:00 am

Jay@9:54

Actually that is exactly what I meant. When I wrote my post I used a sarcasm on/off but it didn’t appear in my real post. So yes my post was marinating in sarcasm.

Butch Cassidy

March 23rd, 2012
10:01 am

St. Simons – “Remember the Georgia Republicans.”

Not so fast, remember the “free pass”. The Georgia Republicans used to be Democrats that switched sides. A REAL Republican would never do anything wrong. So what you have here is just a continuation of failed DEMORATIC policy. You gotta keep up man! ;)

Jm

March 23rd, 2012
10:01 am

Oh. And what the he’ll kind of republican is Rick santorum? The guy is a total douche.

Bill

March 23rd, 2012
10:03 am

“#1 Georgia”

Granny, you are free to move about the country. Southwest is now ready when you are.

Steve

March 23rd, 2012
10:03 am

A dixiecrat and a southern Republican is the same stinky thing.

JohnnyReb

March 23rd, 2012
10:05 am

Bankruptcy has become too easy and allows people to ignore their obligations at the loss of others who entrusted them with credit. It fits in with the high percentage of citizens depending on government for a handout instead of digging ditches/washing dishes.

Pass the Cheesy Grits Please

March 23rd, 2012
10:05 am

What do you expect in a state full of yahoo’s.

mm

March 23rd, 2012
10:05 am

Well, it didn’t take long for a righty to defend this.

You can’t fix stupid.

ty webb

March 23rd, 2012
10:06 am

Butch,
yeah, neither party has a monopoly on hypocrisy.

n

March 23rd, 2012
10:06 am

Are there no honorable people left at all in state leadership? God help us.
No wonder they want to gut education. They want a passive, ignorant electorate–sheep to be fleeced over and over again until there is nothing left worth stealing..

Mighty Righty

March 23rd, 2012
10:07 am

To this day, the left brags about how they confiscated bond holder assets and gave those assets to the United Auto Workers in violation of our laws. That action by the Obama administration made the validity notes subject to the whism of the federal government. For those same people to critcise local governments for what is essentially the same thing is the epitome of arrogance. BTW, I oppose this law as another stupid attempt by politicians to enhance their own authority. Republicans be damned.

Jack

March 23rd, 2012
10:07 am

It’s sordid alright. The sordid started when B Frank wanted everybody to have a house. Didn’t matter if they could repay the loan…just give them a loan anyway. Everybody’s paying the price now.

They BOTH suck

March 23rd, 2012
10:07 am

Is this not class warfare or is that only when the issue comes from the left?

JamVet

March 23rd, 2012
10:08 am

Georgia Republicans and yet more fiscal shenanigans with their buddies in the “free market” (LOL) and their general unabashed corruption?

It’s getting to be as newsworthy as reports that the sun will set in the west this evening.

I was having more fun downstairs exposing the nonsensical DDS (not dentistry) posts about Democrats and the US military…

Butch Cassidy

March 23rd, 2012
10:08 am

JohnnyReb – “It fits in with the high percentage of citizens depending on government for a handout instead of digging ditches/washing dishes.”

I agree. Now go tell your GOP brethern to grab their bootstraps and stop waiting around for the government to save them.

Steve - USA ("None of the Above")

March 23rd, 2012
10:09 am

‘Is this not class warfare or is that only when the issue comes from the left?’

More like class welfare but I see your point.

Pass the Cheesy Grits Please

March 23rd, 2012
10:09 am

Ever notice the lower the education level of a state. The fewer percentage of college grads it has.

The more likely its a red state.

Not real surprising this sort of thing goes on here.

I mean this state did vote for Newt ” Moonbase ” Gingrich and ..

Saxby Chambliss because Max Cleland who left two legs and an arm in Vietnam wasn’t patriotic enough.

TaxPayer

March 23rd, 2012
10:09 am

Republican politicians are pathetic and Georgia’s batch are determined to take the lead position at the bottom of the pack. Yet their constituency will continue to vote them in because they proclaim them to be better than any alternative.

Steve

March 23rd, 2012
10:10 am

I just love watching Mighty Righty try to deflect this…

JOE COOL~DoWnToWn THUG

March 23rd, 2012
10:10 am

Americas Most Corrupt States

And guess what?

#1 Georgia”

And the CONs put voting them RIGHT back in. The CONs here in GA are some arrogant SOBs..

Butch Cassidy

March 23rd, 2012
10:11 am

Jack – “Didn’t matter if they could repay the loan…just give them a loan anyway.”

Yes, and the obscene amount of money made by bundeling those loans and selling them off as derivitives was just another boot in the ass to the good hearted bankers who wanted nothing more than to be released from the oppressive yolk of Barney Frank.

Glen Rice

March 23rd, 2012
10:11 am

Jack just made post of the year.

Doggone/GA

March 23rd, 2012
10:11 am

“Yet their constituency will continue to vote them in because they proclaim them to be better than any alternative.”

And than call for term limits because they can’t trust themselves to vote them out

TaxPayer

March 23rd, 2012
10:11 am

I hope JohnnyReb hates those crooks under the Georgia dome as much as he hates Obama.

Steve - USA ("None of the Above")

March 23rd, 2012
10:12 am

“I hope JohnnyReb hates those crooks under the Georgia dome as much as he hates Obama.”

What did the Falcons do now? ;)

ragnar danneskjold

March 23rd, 2012
10:13 am

The market must have changed significantly during the Obama depression. I never heard of a collection agency buying any debt for more than ten cents on a dollar. Cannot imagine that collection agencies are doing so well that they would bid so high, especially for a large dollar amount where risk of collecting is so much thinner. While the law sounds strange, I cannot envision it benefiting any particular borrower.

ByteMe

March 23rd, 2012
10:13 am

I hope JohnnyReb hates those crooks under the Georgia dome as much as he hates Obama.

In a word: Nah.

Doggone/GA

March 23rd, 2012
10:13 am

“I hope JohnnyReb hates those crooks under the Georgia dome as much as he hates Obama.”

Only the ones with (D) beside their names

Butch Cassidy

March 23rd, 2012
10:14 am

Glen Rice – “Jack just made post of the year.”

Agreed, when I think of what he looks like, all I keep seeing is a guy sitting on a bench waitng for a bus comparing life to a box of chocolates. :)

Keep Up--Te gusta losing woofinpoofs?

March 23rd, 2012
10:15 am

Despite the attempts to deflect by the conned, the simple fact is that the Republicans are bought and paid for by the homebuilders in this state. And the cries of “no regulation” suddenly become regulate and save us from our prior deals by the same who continually tell homeowners that they are at fault. Its shameful.

Steve

March 23rd, 2012
10:15 am

Join the GOP if you are rich! We’ll con the low lifes into voting for us over non existent wedge issues, then we’ll tell them that the safety net they need is socialism or even communism! Then, they vote for us and we keep funneling the money to the 0.05%!

n

March 23rd, 2012
10:15 am

Somebody (D or R) needs to run against this guy before he and his ilk succeed in turning GA into a third world backwater.

St Simons- island off the coast of New Somalia

March 23rd, 2012
10:15 am

Butch (big fan of u) – I think i get it, but to the intelligent natives, it’s not
even funny anymore.

In other New Somalian news, they caught the dumbest criminal
in the world. The causeway is wide open again, watch out for
sea turtles & hoverounds.

Butch Cassidy

March 23rd, 2012
10:17 am

I anticipate a fun blog today. Sort of like when someone uses Newt Gingrich and family values in the same sentence. :)

Steve

March 23rd, 2012
10:17 am

What is an Obama depression? The one where the stock market is back up over 13000 since the Bush Great Recession?

Steve - USA ("None of the Above")

March 23rd, 2012
10:18 am

ragner,

That is one of the major points against the Bill. You are not allowed as a 3rd party buyer of the debt to collect anything more than you paid for it with the exception of Interest.

carlosgvv

March 23rd, 2012
10:18 am

Republicans are the party of the rich. At first, it might seem strange they make no effort to hide this, as is evidenced by this bailout bill. In fact, they have made no effort to hide this since Christian fundamentalists took over the majority of the Republican electorate. So, hiding their total ownership by the rich is not necessary since their electorate majority are very common people who will believe every lie they are told by their politicians. Those of us with enough sense to see these lies don’t count since most of us are Democrats.

Butch Cassidy

March 23rd, 2012
10:20 am

This just in: Builder Bailout Bill Passes. In other news, Etch A Sketch sales triple overnight. :)

Steve - USA ("None of the Above")

March 23rd, 2012
10:22 am

You know this Bill really annoys me and I am not even one of the Contractors who did work for Developers and never got paid.

JOE COOL~DoWnToWn THUG

March 23rd, 2012
10:24 am

When the CONs introduce a bill, all you have to do is ask yourself 2 questions:
1) How does this benefit the RICH?
2 )How does this restrict a woman’s right?

Guaranteed, 85% or more will involve one of these two.

JKL2

March 23rd, 2012
10:26 am

-If you borrowed the money, repay the money. If you can’t repay the money, too bad. Hit the street

I like it. The bank didn’t track you down and force you to buy the house (contrary to what the government likes to say). The amount of the loan shouldn’t have anything to do with that. Kick out the rich and poor alike. Equal justice for all.

They BOTH suck

March 23rd, 2012
10:26 am

“I cannot envision it benefiting any particular borrower.”

Forget Dem or Repub because I could see the Dems doing the same if they were in charge

You think the current crop in charge are just creating this bill for $hits and grins?

Good, bad or indifferent……. It is being created for the benefit of someone

Doggone/GA

March 23rd, 2012
10:29 am

“The bank didn’t track you down and force you to buy the house ”

Nope. And YOU didn’t hold a gun to their heads and force them to give you the loan, either.

Butch Cassidy

March 23rd, 2012
10:31 am

Question: How can you tell the difference between a Democrat and a Republican?

Answer: Beats me .

:)

St Simons- island off the coast of New Somalia

March 23rd, 2012
10:31 am

This state of New Somalia now qualifies for UN monitoring.

Really. That’s not a joke.

Remember the Georgia Republicans. Remember Them.

ty webb

March 23rd, 2012
10:32 am

Democrats and Republicans have finally found something with which they both can agree on…”bailouts for me, but not for thee.”

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

March 23rd, 2012
10:32 am

taxpayers will be on the hook

Sweet music to Conservative ears! Hold the middle class and poor moochers accountable but give my buddy a break….

JOE COOL~DoWnToWn THUG

March 23rd, 2012
10:32 am

This is why CONs hate Obama….. He throws their shyt back at them and makes fun of them.

Obama Asks Woman: ‘Do You Have YOUR Birth Certificate?’

http://nation.foxnews.com/president-obama/2012/03/22/obama-asks-woman-do-you-have-your-birth-certificate

ragnar danneskjold

March 23rd, 2012
10:32 am

Dear Steve @ 10:18, wow, so the real purpose is to put the collection agencies out of business? Georgia has a lot of phone banks, so that will put a lot of people out of business.

My Party has ALL the answers. Your party is full of poopyheads! (formerly That Black Guy)

March 23rd, 2012
10:34 am

mm

March 23rd, 2012
10:05 am
Well, it didn’t take long for a righty to defend this.
__________________________________________________________________________

Which “righty” defended this?

Nevermind. I know it’s easier for you to just LIE!

JamVet

March 23rd, 2012
10:34 am

Thousands and thousands and thousands of Republican bankers not being able to give away money fast enough to their hundreds of thousands of highly risky Republican clients, and nitwits like Jack and Glenn blame Barney Frank???

Otay.

To get a REAL sense of the systemic corruption of Republican bsnkers, etc, just drive up Highway 101 out of LA, past Calabasas, Ca.

Home to the forever disgraced and infamous Countrywide Financial Corporation – the darling of Bank of America.

The stench is damn near visceral…

Butch Cassidy

March 23rd, 2012
10:34 am

St. Simons – “Remember the Georgia Republicans. Remember Them.”

How could you forget them. They’re the ones constantly yelling over the crowd from their soapboxes “HEY YOU MOOCHERS, GET OFF OF MY LAWN!!!!!”

CJ

March 23rd, 2012
10:35 am

As the AJC’s Scott Trubey reports, changes in the bill were made this week to “further narrow its scope, so it would not apply to student loans, credit cards or car loans that are sold on the secondary market.” In other words, the bill was tweaked to remove any chance that it might accidentally help the “little people,” rather than those it was designed to benefit.

Enrich the Rich. Vote Republican.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

March 23rd, 2012
10:35 am

Jay,

“determent” should be detriment?

Keep Up--Te gusta losing woofinpoofs?

March 23rd, 2012
10:37 am

To claim that these are “collection agencies” is deceptive. There are some large corporate players that buy commercial troubled loans and portfolios at a discount to collect. Some of those portfolio sales from defunct banks are guaranteed by agencies like the FDIC.

ty webb

March 23rd, 2012
10:39 am

Spoiler Alert: “the Hunger Games” isn’t set in Ethiopia.

oblama

March 23rd, 2012
10:40 am

I’m not for bailing out anyone PERIOD – including foreign countries. All of this bailing out started with the Dems and Jimmy Carter so don’t act like it’s all the Repubs. The Dems invented bailouts…. if it was union run bail it out. Chrysler was bailed out by Jimmy Carter and now it’s foreign owned. If the Fed government had been doing it’s job we wouldn’t even be talking about bailouts. Doesn’t the Fed government spend billions on regulating industry and aren’t they supposed to make sure the regulations are followed? Evidently their regulators (SEC, etc.) were on vacation or sick leave when the Savings & Loans, Big Banks, Dot.coms, etc were ripping us off. They are like the cavalry riding in on horse back after the village has been destroyed by the enemy. Don’t give me this B.S. about deregulation. There was insight in place to stop this but the regulators, being paid millions, were inept like the rest of the Fed government and asleep at the wheel. When you don’t do your job in the private sector you get fired. Did we ever hear of anyone being fired for their inept oversight of these crooks? Did the government call in outside, unbiased minds to see why the oversight failed and who was responsible? No. This disaster was a joint effort of the criminals in the private sector and the inept oversight of the Fed government. Time to clean house. Time to get rid of the lifers in the Fed government and bring in new blood. We have term limits for the president. We need term limits for Congress. Bookman – wish you were unbiased but it is obvious you are a flunky for Oblama.

Jay

March 23rd, 2012
10:40 am

Finn, Reynolds’ letter used “determent”, and it does fit in the context.

TaxPayer

March 23rd, 2012
10:40 am

Georgia’s Republicans wear the “con” badge proudly, like a badge of honor.

Mighty Righty

March 23rd, 2012
10:40 am

Steve, try to refute what I said. Just the facts will do. Cheesy, ever notice how the states with the highest percentage of illegals that can’t speak english are blue states?

larry

March 23rd, 2012
10:41 am

The Builder Bailout Bill promoted by Balfour is Being Boofed By Boring Box Builders who Build Banks.

Who needs Dr. Seuss

They BOTH suck

March 23rd, 2012
10:42 am

Oblama

Wasn’t Ford before Carter? Didn’t he bail out NYC?

Butch Cassidy

March 23rd, 2012
10:43 am

oblama – “All of this bailing out started with the Dems and Jimmy Carter”

Gotcha. So the Republicans defense on this is going to be “Hey, the Democrats started it”. Do you think they brought up Bill Clinton and Monica Lewinsky as well before voting?

Streets of Buckhead Developer

March 23rd, 2012
10:43 am

Thank you Georgia Republicans!!!

It is great to know you are there to BAILOUT us JOB CREATORS when we need you.

You gullible petty Georgians are even easier to play than the pay-to-play politicians in Vegas. The DAWGS are #!!! (in corruption)

Jay

March 23rd, 2012
10:43 am

Oblama, you can trace the bailouts back to the great Lockheed Bailout of 1971 under Richard Nixon.

A Republican.

And Mighty, you should be one of the very last people on this blog preaching the importance of facts. You have forfeited all credibility in that regard.

larry

March 23rd, 2012
10:43 am

Um, Oblama , Lockheed was bailed out in 1971 under a Republican adminstration.

Bailouts of corporations have been going on for a while.

Moderate Line

March 23rd, 2012
10:44 am

Is this not the same thing as the auto bailout? We have a bankruptcy court but the government step in to protect certain interest for political reason because they knew the bankruptcy courts would not.

JamVet

March 23rd, 2012
10:44 am

The Dems invented bailouts.

Ronald Reagan was a Democrat???

Try again fabricator…

The deregulation of S&Ls in 1980 gave them many of the capabilities of banks, without the same regulations as banks. Savings and loan associations could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, state-chartered thrifts rushed to become federally chartered, because of the advantages associated with a federal charter. In response, states such as California and Texas changed their regulations to be similar to federal regulations.[citation needed]

More important, however, was the moral hazard of insuring already troubled institutions with public dollars. In the view of a savings and loan president or manager, the trend line was fatal over the long haul; thus, to get liquid, the institution had to take on riskier assets, particularly land. When the real estate market crashed, the S&Ls went with it. By insuring the risk, the government guaranteed that desperate S&L owners and managers would engage in ever more risky investments, knowing that if they were successful, the institution would be saved, and if unsuccessful, their depositors would still be bailed out.