onomy was not created by the Congress and the financial services industry in the absence of guidance and pressure from the Reagan and Bush Administrations.
In the United States, national politicians, from the president on down, tend to treat the savings and loan crisis, as they do the drug crisis, and all other crises: as if it is some alien animal in our midst, which has no relation to our society, and must be fought to the death. As is true with respect to the drug crisis, and other crises, this approach to the savings and loan crisis overlooks the facts that (1) the savings and loan crisis is the result of actions and policies integral to American society and federal governmental policy, and (2) the savings and loan crisis is not an isolated phenomenon within the American financial environment it is related to other quite recent financial sector debacles. In contemporary American society, government policy exerts a significant influence on almost all aspects of daily life. Prospects for the financial well being of individuals, thus, are, to a great extent,
. . . determined by public policy, by those decisions which shape contemporary environments in communities, workplaces, homes, and schools. Public policy sets parameters for the mode and character of industrial and agricultural production, corporate management, and individual behavior (Milio, 1981, p. 3).
The savings and loan crisis was brought into sharp focus for the American people in the summer of 1989, when it had developed
to a point where both the Bush Administration and the Congress could no longer afford to behave as if the problem did not exist. By that time, hundreds of savings and loan associations were either insolvent, or were in danger of becoming insolvent in the relatively near future (Dentzer and Plattner, 1989, pp. 20 22). Knowledgeable sources contended that the thrift industry as a whole was losing between $300 million and $400 million...