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Wall Street Heat: From Summer's Dissent: Clinton, Greenspan & HBG
A powerful excerpt from this summer's Dissent Magazine tells the story of Clinton Administration role in today's Wall Street meltdown. How President Clinton signed off on Phil Graham's abrogation of the Glass-Steagall Act of 1933. It happened in 1999, a year when optimism was like syphilis to the brain, killing a law from 1933, a year when tumult made men sober and rational:
The Mother of All DeregulationTHE CLINTON administration’s free-market program culminated in two momentous deregulatory acts. Near the end of his eight years in office, Clinton signed into law the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, one of the most far-reaching banking reforms since the Great Depression. It swept aside parts of the Glass-Steagall Act of 1933 that had provided significant regulatory firewalls between commercial banks, insurance companies, securities firms, and investment banks.
It also discusses a warning from Henry B. Gonzalez, Jr.:
It is easy to forget that Clinton had other alternatives. In 1993, Democrats in Congress were attempting to rein in the Federal Reserve by making it more accountable and transparent. Those efforts were led by the chair of the House Banking Committee, the late Henry B. Gonzalez, who warned that the Fed was creating a giant casino economy, a house of cards, a “monstrous bubble.” But such calls for regulation and transparency fell on deaf ears in the Clinton White House and Treasury.
No matter which way you slice these cow chips, these are cow chips from both sides of the aisle.
The partisans have highly educated, well spoken leaders. They include Rhodes Scholars whose intellectual facility helps them paint recklessness as rational.
If you have all the right arguments to convince yourself, that may be all that is needed to wreak destruction on the economy.
Comments (5)
Clinton had no choice but to sign the Gramm-Leach-Bliley Act of 1999. It was veto proof
Now let's do a little name matching: Phil Gramm (R-TX), James Leach (R-IA), Thomas J. Bliley, Jr. (R-VA).
Cowchips alright.
September 17, 2008 8:49 PM | Reply | Permalink
Things are not always symmetric. Things are usually not symmetric.
Clinton in 1999 was beaten man, because of a highly asymmetric campaign to destroy him. Of course, we did succeed in catching him getting sucked, so that's a good thing, I guess.
Nope, undoing Glass-Steagall was GOP policy. Who wanted banking restrictions in 1933? Hoover's party?
Lassiez-faire means a few get lucky and the rest get fucked.
September 17, 2008 9:11 PM | Reply | Permalink
"On each of these crucial issues, the most significant differences between Clinton and Bush were differences in timing and degree, not in direction. Both administrations were willfully asleep at the wheel. Clinton was fortunate to preside over the early stages of a bubble economy. Bush has had the misfortune of presiding as a lame duck through the final stages of the same bubble and, thanks to the deregulation of the Clinton years, without a regulatory structure capable of containing today’s speculative fevers."
--Same source as abve.
September 19, 2008 5:15 PM | Reply | Permalink
The banks and their lobbyists sought repeal of Glass-Steagall.
The Contract with America was instrumental in making it possible.
Democrats deserve credit for opposing the repeal.
And Newt Gingrich was central to it all.
My next question goes to the Board of the American Enterprise Institute and all of the major press players who still interview Gingrich as an expert on anything at all:
Can I have his job? I think I could beat his analytic record.
September 18, 2008 8:05 PM | Reply | Permalink
On Clinton:
Clinton's personal storm should not have kept him from loudly and insistently fighting the deregulation of Glass-Steagall's firewalls.
September 18, 2008 8:06 PM | Reply | Permalink
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