Bill Clinton and the repeal of the Glass-Stiegal Act

[pnorman]

http://www.progressivehistorians.com/2007/11/bill-clintons-role-in-mortgage-crisis.html

Good read!

[izquierdista]

1. I think I'll skip it

Living through it was enough to make me At the time I remember wondering if the stain on Monica's dress was the last of Bubba's grey matter.

[surfdog]

2. How much say did bubba have ?

Was the bill veto proof ?

What of he DID veto the bill ? ... Would it have just been sent back for his signature ?

[izquierdista]

4. He had a lot of say

Saying how it was the greatest thing since sliced bread.....or whatever else Rubin was whispering in his ear.

[JoePhilly]

6. From what I know ...

The bill was mainly passed by the GOP controlled Senate, with some of our favorite blue dogs joining.

Bill might have been able to veto it ... but at the time, the potential after effects were not as easy to see. After all, the time bombs set in the Gramm–Leach–Bliley Act of 1999 did not actually "go off" until 2008. And folks claiming to know what will happen 10 years in the future, don't often get enough traction.

Regardless ... any attempt to claim that Bill Clinton actually drove this bill, is BS. He made the rather large mistake of signing it ... but this was not a key part of his agenda.

It WAS a key part of the GOP agenda ... and in 2008, its effects became real.

[surfdog]

15. The senate vote was 90-8

[JoePhilly]

24. Yup ... and if I recall ...

there was an earlier version of the same bill which had somewhat less support, but still more than 50, and maybe close to 60 votes ... and some "changes" were made which put it past the veto threshold.

At that time, the parties had yet to reach the point where nothing passed without 60 cloture votes ... and that if one side had the votes, that was respected as "the will of the people" ... and filibusters and vetoes were reserved for "extreme" situations.

The GOP has ensured that going forward, you better have 60 votes in the Senate, and you may need 2/3rds if the President is from the GOP with a Dem Senate.

[Sirveri]

17. It was written by three GOP'ers and was veto proof.

Passed by almost the same margin as the NDAA BS that just passed.

[The Straight Story]

20. True perhaps, but one can still veto things on principle (nt)

[surfdog]

21. And bill would have looked very weak

When his own party sent it back

[The Straight Story]

23. I'd rather look weak to those who were weak, than actually be weak (nt)

[JoePhilly]

3. Actually, that article is BULL SHIT, and I'll explain why.

The article does get one fact right ... Bill Clinton did sign a piece of legislation that repealed Glass Steagall in 1999

But the article never really names that piece of legislation or its authors. Nor does it describe the legislative events which occurred in the Congress around that specific legislation.

No ... instead, the article does only one thing, it tries to explain to the uninformed that Bill Clinton, apparently on his own, decided to repeal Glass Steagall. Which is utter nonsense.

For those who care ... the actual piece of legislation is also known as the The Gramm–Leach–Bliley Act of 1999.

It was Gramm who slipped in not only the repeal of Glass Steagall, but also those provisions which allowed the kind of derivative trading which destroyed our economy in 2008.

After this legislation passed (and I do agree Clinton should have never signed it) ... Gramm, the architect of the bill, left congress and was appointed to the Board of financial giant UBS, where he made MILLIONS.

Oddly, the article does not seem to be aware of that either. It appears to be too busy trying to claim that Clinton was the architect of this disaster.

Clinton fell for the trap, but the actual trap was built by Gramm and the GOP congress.

[redqueen]

5. +1

It wasn't a cut and dry process. The first version of the bill didn't get overwhelming support in congress but after some changes it was indeed veto proof.

[JoePhilly]

7. In one version of this that I read a while ago ...

Some also claimed that a few of the worst provisions were actually added to the bill, by Gramm, right before the vote took place ... like the day before ... and these "changes" were described as "clarifications to address concerns" ... and so, some who had held back believed that these "changes" probably addressed their key concerns ...

This goes to the "do they even read the legislation" debate ... at that time ... usually, they had staff reading the last minute changes ... and so it was easy to slide in some ear mark, or some other provision.

[Old and In the Way]

8. Excellent Post.

As you point out, BC did make a mistake in signing it. But, IIRC, he might have been a tad distracted with that impeachment problem that was taking place at the time. This was a classic piece of republican legislation. From Wikipedia-

The banking industry had been seeking the repeal of the 1933 Glass–Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report that explored the cases for and against preserving the Glass–Steagall act.[3]

Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.

During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[4]

The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343-86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[5][6][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[8][9][10][note 2]

When the two chambers could not agree on a joint version of the bill, the House voted on July 30 by a vote of 241-132 (R 58-131; D 182-1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).[note 3]

The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[9][12] On November 4, the final bill resolving the differences was passed by the Senate 90-8,[13][note 4] and by the House 362-57.[14][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[1

[JoePhilly]

9. And may I say .. Great ADDITION to my post ... !!!

I was working off the top of my head, you added some great details !!!!

I wish more people knew this history ... because it also kills the "Fanny and Freddie created the collapse" nonsense.

[Cameron27]

11. Thanks to you too.

Appreciate it.

[Whisp]

12. was he distracted or

his impeachment WAS the distraction.

[surfdog]

14. You claim that...

Bill made a mistake by signing the bill , then you posted text explaining the bill was veto proof

Bill had to sign the bill

[Sirveri]

18. He didn't have to sign anything, but it would have passed anyways.

A veto is a nice statement however, even if it doesn't do anything.

[surfdog]

19. Nearly every democrat voted for the bill

Clinton would never veto such a bill

[Cameron27]

10. Interesting, thanks.

I knew Gramm was the architect, not Clinton, but at the time I was working 2 jobs, raising 3 kids & taking care of a very sick husband, so I was the least politically tuned in than I've been at any time in my adult life.

Good to revisit & tidy up the vague details. Wish someone would do the same for NAFTA. What was the hell was Clinton thinking & exactly how bad are the consequences.

Thanks again, really appreciate any info that fills in the gaps.

[JoePhilly]

25. NP ... and I understand the situation you describe ...

And I think some in the media try to take advantage of the fact that so many of us are too busy to follow this stuff closely on a daily basis.

Back in 1999, I had one child.

And, the other thing is that the debate on this bill struggled because the potential impact was predicted to be 10 or more years away ... and so how does a family with 1, 2, or 3 kids, get time to try to determine if that prediction has any merit??

As for NAFTA ... ugh ... the history there is also complicated ... the structure of that started under GHW Bush, and it was "on the table" when Clinton came into office ... one view is that Clinton signed on to it as a gesture of good faith. A way to get the GOP to agree to some of Clinton's initiatives.

The liberal idea in NAFTA is that we can improve the lives of all of the world's people, though open trade. You bring the poorest countries forward by giving them jobs so they can feed their families, their lives improve, they become consumers, and everyone does better.

But in practice, that model also creates a DRAG on the US middle class because it brings new workers into the work force, and many of those workers will work for very little. And NAFTA did not do enough to protect the US worker from this reality.

Business owners got access to cheap labor in other countries, and that creates downward pressure on US workers.

There is some backlash to this.

Lots of US technology companies sent tech jobs to India ... and they are now bring those jobs back because the quality is not the same. But that does not fix the damage done.

I wish I had an answer for how we have a global economy, that benefits everyone, and yet do so in a manner that does not require many in the US to lower their standard of living.

And as always ... the top 1% will NOT be impacted by any of this.

[Old and In the Way]

26. That is a core conflict.

"The liberal idea in NAFTA is that we can improve the lives of all of the world's people, though open trade. You bring the poorest countries forward by giving them jobs so they can feed their families, their lives improve, they become consumers, and everyone does better. " But that has meant that the middle class has taken a hit on their SOL. Interesting that this reality produced the opposite effect for the top 5%, though. No economic suffering there.

[joshcryer]

28. An oldy but a goodie, Krugman on NAFTA:

http://www.pkarchive.org/trade/ForeignPolicyStupid.html

The internationalist, liberal, progressive view is to help other states and not be isolationists, NAFTA as implemented by itself could not account for all the factors that went into play over the past two decades. It did exactly what it was supposed to do and ultimately liberals were too optimistic thinking that both states would implement the reforms necessary to make it a two way beneficial relationship (at least, they've been slow at it, Mexico has been reforming, and we had 8 years of Bush and Obama hasn't seriously renegotiated NAFTA or tackled that since he took office, probably low priority).

Yes, the basic intent was to help Mexico at our expense.

[lumberjack_jeff]

13. +2 n/t

[AtomicKitten]

16. Here's an interesting clip from TYT on this.

Last edited Fri Jan 13, 2012, 09:31 PM - Edit history (1)

[NashvilleLefty]

22. Although I agree that repeal of Glass-Steagal

was a HUGE mistake and ultimately did lead to many of the problems of the current recession, this reads like a "hit piece". Just read the first 2 sentences:

Many Democrats wish Bill Clinton still occupied the White House. However, before you put him in Mt. Rushmore, you might want to investigate his role in the mortgage foreclosure crisis.

Now, I agree that some Leftys look at Bill Clinton like Rightys look at Ronald Regan and we should have an objective look at each of them, but this particular piece seems to take many liberties.

Repealing Glass-Steagal was a mistake, but it wasn't all Clinton's fault. And it wasn't a total repeal of the New Deal as the blogger suggests. The repeal was wrong and a major mistake, but it's also wrong to summarize Clinton's 8 years with this single mistake IMHO.

It would be much more productive to create a new, updated version of Glass-Steagal rather than pointing fingers.

[Cameron27]

27. Love this thread

great discussion, differing opinions, no name-calling and I learned some things I didn't know. Definitely need more of this around here.

Kick

[mmonk]

29. In addition to Gramm-Bliley-Leech, the Clinton administration

blocked regulation of the OTC derivatives market. Here follows a video:

I was going to avoid posting here until after the 2012 elections but decided to add this information. Interesting thread.

[mdmc]

30. meh

I'll pass