The 1980s Savings and Loan Crisis What Went Wrong

In this episode, Lucas and Luna revisit the Savings and Loan Crisis of the 1980s and early 1990s, which cost American taxpayers over $150 billion. They focus on the specific deregulatory moves—like the Garn-St. Germain Act of 1982—that allowed thrifts to gamble on risky commercial real estate and junk bonds. Lucas explains how the 'moral hazard' problem played out in real time, with directors of insolvent S&Ls doubling down on bad bets. Luna highlights the role of the Keating Five scandal, where five U.S. senators intervened with regulators on behalf of Charles Keating's Lincoln Savings and Loan. They also draw a contrast with the 2008 financial crisis, noting key differences in regulatory architecture and the speed of government intervention. The episode closes with a reflection on what lessons from the S&L crisis still apply today, especially regarding deposit insurance and regulatory capture. #SavingsAndLoanCrisis #GarnStGermainAct #KeatingFive #CharlesKeating #MoralHazard #DepositInsurance #S&L #ThriftIndustry #1980sDeregulation #FinancialCrisis #RTC #LincolnSavings #CrisisHistory #EconomicHistory #Economics #FexingoBusiness #BusinessPodcast #LessonsLearned Keep every episode free: buymeacoffee.com/fexingo