George Bush Sr and the Savings and Loan Crisis

Introduction

There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other politicians that are still in office and still part of the Bush Jr. administration today. Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 TRILLION dollars (note that this is about one quarter of our national debt).

Between 1981 and 1989, when George Bush finally announced that there was a Savings and Loan Crisis to the world, the Reagan/Bush administration worked to cover up Savings and Loan problems by reducing the number and depth of examinations required of S&Ls as well as attacking political opponents who were sounding early alarms about the S&L industry. Industry insiders were aware of significant S&L problems as early 1986 that they felt would require a bailout. This information was kept from the media until after Bush had won the 1988 elections.

Bush attended the Greenwich Country Day School and Phillips Academy, exclusive private schools, where he excelled both in the classroom and on the athletic field. After graduating from Phillips in 1942, he enrolled in the U.S. Navy Reserve and was commissioned a navy flight pilot in 1943, serving in the Pacific for the duration of World War II. Secretly engaged to Barbara Pierce, Bush married this daughter of the publisher of Redbook and McCall's in Rye, New York, on January 6, 1945. The Bushes became the parents of six children (one of whom died of leukemia when three years old).( Mayer, 127)

George Herbert Walker Bush was born on June 12, 1924, in Milton, Massachusetts. His father, Prescott Bush, was a managing partner in the Wall Street investment firm of Brown Brothers, Harriman and also served as U.S. senator from Connecticut from 1952 to 1962. His mother, Dorothy Walker Bush, was the daughter of another prominent Wall Street investment banker, George Herbert Walker (George Bush's namesake), and the founder of the Walker Cup for international golfing competition. George Bush grew up in the affluent New York City suburb of Greenwich, Connecticut, vacationing in the summers in Kennebunkport, Maine, where he later maintained a home.( Mayer,126)

The Savings and Loan Crisis: Lessons from a Regulatory Failure sets the record straight about what actually happened to our banking institutions in the 1980s. As is documented by the highly respected and diverse group of former regulators, scholars and practitioners contributing to this book, the collapse of this industry was caused by a confluence of adverse economic conditions and misguided regulatory decisions. Poorly designed deposit insurance, faulty supervision, and restrictions on investments prevented savings and loans from adapting to a changing financial marketplace. Unable to use financial innovations, savings and loans could not hedge interest rate and credit risks. These factors blocked portfolio diversification and lay at the root of the crisis.

Discussion

Becoming vice ...