[manderson2080]

This whole problem had two starting points.

1. The repeal of the Glass-Steagal act. This allowed banks to undertake the business of commercial banks, investment banks, and insurance agencies. That means that, banks were able to build these complex derivatives, use money from people's savings accounts to partake in risky investments, and then insure them with high standards. All from under one roof.

2. The investment firms went public. This was a fundamental change in the 80's where Goldman, Morgan Stanley, and many others where they became officially owned by the public. That ment that the risk of all their losses was owned by the shareholders as well as profits. Risky investing became the norm, because if you lost a ton of money for Goldman, you may have gotten chewed out or lost your job. But if you made a ton of money for Goldman, you had a very large bonus waiting for you.

Now this mindset has just grown out of hand. It's greed that is driving our financial center, Wall Street.

[aaronbrethorst]

Also known as the Gramm-Leach-Bliley Act. http://en.wikipedia.org/wiki/Gramm–Leach–Bliley_Act

That Gramm guy is Phil Gramm, who later went on to say that the recession was all in our head's and that we're a nation of whiners. http://www.huffingtonpost.com/2008/07/10/mccain-adviser-amer...

He also happened to be McCain's chief economic advisor and a co-chair of McCain's national campaign during the 2008 Presidential campaign. http://money.cnn.com/2008/02/18/news/newsmakers/tully_gramm....

Too bad we elected a socialist to the White House. Think how much better we'd be off with McCain and Palin right now! Goldman Sachs would be just fine! The economy would be great! Phil Gramm would be vindicated!

Or we'd be living in the economic equivalent of the Weimar Republic right now. Yeah, that's probably more likely.