Summary: The 1980s Financial Crisis

“Never assume all is well when it comes to your savings or loans. Get a printout to ensure you know exactly what is happening.” When thinking about a financial crisis in the United States, one typically recalls the most recent financial meltdown of 2008, which affected different economies around the world as well. However, there is another financial crisis that plagued the United States that is somewhat comparable to the recent 2008 crisis and that is the Savings and Loan Crisis of the 1980s. This was one of the largest scandals in banking history in the United States and it started in the 1970s and began to slow down in the 1980s before finally ending in the 1990s. The savings and loan industry was originally created to help consumers pursue

American Continental Corporation went bankrupt and Lincoln Savings and Loan was seized by the government. This was the largest bank failure of the 1980s and the 1990s, which totaled to $2 billion. Ethically and logistically, there is very little difference between what Charles Keating did over 20 years ago during the Savings and Loan debacle, and what Wall Street bankers did in the lead up to the 2008 financial meltdown. Much like the people in charge of Bear Stearns, Lehman Brothers, and Bank of America, Charles Keating took advantage of loose regulations to make risky, and even unsustainable investments. Also, like the people in charge of Bear Stearns, Lehman Brothers, Bank of America and others, Charles Keating passed the cost of those risky investments on to the everyday investors, ruining the livelihoods of many people around the

No major player in the “Great Mortgage Bubble of the 2000s” has gone to jail for their crimes. And as the Stock Market continues to rise, and the Big Banks get bigger and bigger, the shadow of the Savings and Loan Crisis looms larger each and every day. By throwing the Savings and Loan bankers in jail, our government sent a message: If you rip people off, you pay for it, and it gave that message extra weight by stripping the bankers and their investors of their assets, by nationalizing those assets, and then reselling them to the public, using a special agency that the Reagan Administration set up, called the Resolution Trust Corporation. In the wake of the Savings and Loan Meltdown, our government did exactly what governments should do after a banking crisis. They treated the Savings and Loan Crisis as a criminal matter and managed to punish the people responsible for the crimes in