Larry Summers! Larry Summers!

[lsanderson]

On November 5th, 1999, the man who is now Barack Obama's chief economic adviser was Bill Clinton's Treasury Secretary. It was the day that Congress passed a bill that he had lobbied hard for, the Gramm-Leach-Bliley Financial Services Modernization Act of 2000. And as I'm very glad to have been reminded by Boing-Boing guest blogger Richard Metzger, who dug it out of the New York Times archives, this is what Lawrence Summers had to say about Gramm-Leach-Bliley: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century. This historic legislation will better enable American companies to compete in the new economy." (Stephen Labaton, "Congress Passes Wide-Ranging Bill Easing Bank Laws," NYT, 11/5/99, page A1.) Here's what the bill's primary sponsor, John McCain senior economic adviser Phil Gramm had to say about it that day, from the same article: "We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer."

And here's what North Dakota senator Byron Dorgan said, again from the same article: "I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010. I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness." But then, he's basically nobody, right? Who's going to believe a bench-warming nobody from the middle of nowhere, when celebrated geniuses from both political parties say otherwise? Who's going to listen to a borderline socialist from one of the last states in the US to still have a Democratic Farm-Labor Party instead of a Democratic Party, Minnesota DFLP senator Paul Wellstone, when he says that all these experts are "determined to unlearn the lessons from our past mistakes," when (unnamed) math wizards from the most prestigious economics school in America, the University of Chicago, are assuring the NYT's reporter that "the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks."

Epimetheus howled. More

Shamelessly Stolen from bradhicks

Comments

[shelleybear.livejournal.com]

Hey, I like this.
What a shame no one listened.
Also important to note:
As much Clinton's fault as Bush's.
And, if Obama doesn't roll back the rules, it WILL be his fault.