Oh look. "It's Clinton's fault"

[deminks]

I don't bother with McClatchy anymore. I had hopes for them, but lately no. I did happen to catch this title, though"

Wall Street crisis is culmination of 28 years of deregulation

http://www.mcclatchydc.com/227/story/52559.html

Such troubles were supposed to have been prevented, or at least mitigated, by regulatory systems that the nation began to put in place after the banking system collapsed at the start of the Great Depression.

Many banks at the time were badly wounded by their personal and financial ties to securities trading. The 1933 Glass-Steagall Act, and later the 1956 Bank Holding Company Act, mandated the separation of banks, insurance companies and securities firms.

Those and many other federal laws stabilized the banking and securities markets, but by the 1970s, a stumbling U.S. economy led to a change in America's political-economic values. Ronald Reagan led a movement that came to power in 1980 proclaiming faith in free markets and mistrust of government. That conservative philosophy has dominated America for the past 28 years.

Even after taxpayers had to rescue deregulated savings and loans, or S&Ls, with a $200 billion bailout in the late 1980s, the push to loosen regulation paused only briefly.

In 1999, President Clinton signed the Financial Services Modernization Act, which tore down Glass-Steagall's reforms by removing the walls separating banks, securities firms and insurers.

(end snip)

But looking a little further into the act that supposedly tore down the Glass-Steagall Act:

http://en.wikipedia.org/wiki/Glass-Steagall_Act

The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation. Some provisions such as Regulation Q that allowed the Federal Reserve to regulate interest rates in savings accounts were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Other provisions which prohibit a bank holding company from owning other financial companies were repealed in 1999 by the Gramm-Leach-Bliley Act.

(end snip)

Did you catch that? The Gramm-Leach-Bliley Act, as in Phil Gramm?

Why, none other than:

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

(snip)

The bills comprising the act were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed along party lines with Republican support in the Senate<1> and with bipartisan support in the House of Representatives<2>. It was signed into law by President Bill Clinton.

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.<3>

(snip)

Senator Phil Gramm led the Senate Banking Committee which sponsored the Act; he later joined UBS Warburg, at the time the investment banking arm of the largest Swiss bank.

(end snip)

My point is, let's give credit where credit is due. Yes, Clinton signed the bill, but who put the bill through Congress? None other than McShame's right hand economy expert whiner-buster extraordinaire, Phil "Enron Loophole" Gramm.

We have been Enroned.

[brentspeak]

1. Clinton was a fool for signing the bill, but it was Phil Gramm and the GOP

who wrote the damn thing.

[thecrow]

6. See this article...

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/09/ED7R12R6CA.DTL

Yes, it ws Phil Gramm who lobbied for an wrote the act.

Gramps says "We will never let this happen again"
I say "Im going to do everything in my power to see you NEVER HAVE THE CHANCE!"

[nadinbrzezinski]

2. Clinton SHARES some of the responsibility for SIGNING it

sorry... I don't give him a pass

That said, if McCain gets elected guess who's the next sec of the treasury? Hoover II himself, Phill Gramn

[Old and In the Way]

3. What elso was happening in that time frame?

Oh yeah, the impeachment (12/98). I suspect that BC had other priorities and pretty much '0' political capital to fight this bill. I hate to be an apologist for Clinton, but we need to put this in perspective. He was a wounded duck in 1999 and that allowed this bill to sail through with little political resistance.

[lurky]

4. Sorry, Big Dog signed a lot of Republican bills I didn't like.

Frankly, I don't know why they hated him so much.

[firedupdem]

5. But they have had 8 years and a lot of warning to change them

if they were so wrong. I'm kind of new to all this but they could have changed them right? They have had total control for at least 6 of the last 8 years.

[Eric J in MN]

11. Most of the Senators who voted for the bill are Republicans.

http://www.govtrack.us/congress/vote.xpd?vote=s1999-105

[Hubert H. Hubert]

7. Clinton bears the sole responsibility for making the bill law

It was not veto-proof in the Senate. Sorry, but this is one time when it really was the Clenis.

[deminks]

8. Here is a timeline from PBS

It talks a lot about Greenspan's role. It also looks like the Citigroup deal took place first, then the rethugs had to get the law repealed to protect the deal.

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

At a dinner in Washington in February 1998, Sandy Weill of Travelers invites Citicorp's John Reed to his hotel room at the Park Hyatt and proposes a merger. In March, Weill and Reed meet again, and at the end of two days of talks, Reed tells Weill, "Let's do it, partner!"

On April 6, 1998, Weill and Reed announce a $70 billion stock swap merging Travelers (which owned the investment house Salomon Smith Barney) and Citicorp (the parent of Citibank), to create Citigroup Inc., the world's largest financial services company, in what was the biggest corporate merger in history.

The transaction would have to work around regulations in the Glass-Steagall and Bank Holding Company acts governing the industry, which were implemented precisely to prevent this type of company: a combination of insurance underwriting, securities underwriting, and commecial banking. The merger effectively gives regulators and lawmakers three options: end these restrictions, scuttle the deal, or force the merged company to cut back on its consumer offerings by divesting any business that fails to comply with the law.

Weill meets with Alan Greenspan and other Federal Reserve officials before the announcement to sound them out on the merger, and later tells the Washington Post that Greenspan had indicated a "positive response." In their proposal, Weill and Reed are careful to structure the merger so that it conforms to the precedents set by the Fed in its interpretations of Glass-Steagall and the Bank Holding Company Act.

Unless Congress changed the laws and relaxed the restrictions, Citigroup would have two years to divest itself of the Travelers insurance business (with the possibility of three one-year extensions granted by the Fed) and any other part of the business that did not conform with the regulations. Citigroup is prepared to make that promise on the assumption that Congress would finally change the law -- something it had been trying to do for 20 years -- before the company would have to divest itself of anything.

[MadHound]

9. Clinton is still guilty on this one, after all, whose name is that on the bottom of the law?

Oh, yeah, Bill's. What, you think that the financial sector in this country backed Bill because of his good looks? Wall Street ponied up pretty damn well for Bill during the elections and they wanted bang for their buck and got it.

Yes, Clinton deserves his fair share of blame for this mess.

[Eric J in MN]

10. Joe Biden voted against this.

----------------------------------------------------------------
http://www.govtrack.us/congress/vote.xpd?vote=s1999-105


Senate Vote On Passage: S. 900 <106th>: Gramm-Leach-Bliley Act
Vote Number: Senate Vote #105 in 1999
Date: May 6, 1999 8:14PM
Result: Bill Passed
Related Bill: S. 900 <106th>: Gramm-Leach-Bliley Act

Overview
Totals Democrats Republicans Independents All Votes
Ayes: 54 (54%)
1 44 1
Nays: 44 (44%) 39 0 1
Present: 1 (1%) 0 1 0
No Vote: 1 (1%)


...Nay DE Biden, Joseph
------------------------------------------------------------


So did Paul Wellstone, Harry Reid, Barbara Boxer, Dianne Feinstein, Joe Lieberman, and Chris Dodd.

EVERY Democratic Senator voted No except for Ernest Hollings of South Carolina.

John McCain voted Yes.

Why did Bill Clinton sign a bill too right-wing for Dianne Feinstein and Joe Lieberman?