Fred Burns

1 Pages 346 Words

The Savings and Loan scandal is the largest theft in the history of the world. Deregulation eased restrictions so much that S&L owners could lend themselves money. The Garn Institute of Finance, named after Senator Jake Garn, co-authored the deregulation of the industry and received $2.2 million from industry executives. Neil Bush, George Bush's son, never served time in jail for his part in running an S&L into the ground. Represenative Fernard St. Germain, who was head of the House of Representatives banking, co-authored the deregulation and was voted out of office after other questionable dealings and was sent back to D.C. as an S&L lobbiest. Charles Keating, when asked if massive lobbying efforts had influenced the government officials, he replies, "I certainly hope so. "The rip-off began in 1980 when the government raised the federal insurance on S&L's from $40,000 to $100,000 even though the typical savings account was only around $6000. Some of the seized assets were a buffalo sperm bank, a racehorse with syphilis, and a kitty litter mine. James Fail invested $1000 of his own money to purchase 15 failing S&L's. The government reimbursed him $1.85 billion in federal subsidies. It sometimes took over 7 years to close failing S&L's by the government. When S&L owners who stole millions went to jail, their sentances were typically one-fifth that of the average bank robber. The goverment bail out will cost the taxpayers around $1.4 trillion dollars when it is over. If the White House had stepped in and bailed out the S&L's in 1986 instead of delaying until after the 1988 elections, the cost might have been only $20 billion. With the money lost from the S&L scandals, the government could have provided prenatal care for every American child for the next 2,300 years. With the money lost from the S&L scandals, the government could have purchased 5 million average homes. The authors of "Inside Job", a book about the S&L scandal,...