Tuesday, July 15, 2008
Keating Five and the S&L Crisis
BREAKING NEWS UPDATE!
We almost forgot about Tentacle Tuesday!
Since this doesn't seem to be getting enough coverage in the interwebs I thought I'd throw this historical reminder out there before returning to doggy blogging.
Here's one of the 5 politicos
who played a role in (Wiki entry below):
The U.S. Savings and Loan crisis of the 1980s and 1990s was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around USD$160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government -- that is, the U.S. taxpayer, either directly or through charges on their savings and loan accounts-- , which contributed to the large budget deficits of the early 1990s. The resulting taxpayer bailout ended up being even larger than it would have been because moral hazard and adverse-selection incentives compounded the system’s losses. 
The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed per year dropped from 1.8 million to 1 million, the lowest rate since World War II. 
Perhaps because I love nice hotels and being on vacation, I'm thinking of Paul Auster's Hotel Existence for now.