2016 Postmortem
In reply to the discussion: Why I DON'T support Bernie for President [View all]ChairmanAgnostic
(28,017 posts)especially about the banking industry.
That's OK. Many people are ignorant about many subjects. But they don't make baseless claims like you did.
When Clinton helped destroy our economy with his deregulation of Wall, he set into motion a series of events that continue to harm us. Banks used to have limitations that prevented fraud, scandal, and theft. Glass Steagall's demise was one of several factors that have led to the destruction of the middle class. It barred any one bank from acting as a commercial bank, as well as an investment bank,even as an insurance company. GrammLeachBliley Act, signed into law by Bill Clinton, allowed commercial AND investment banks, securities firms, and insurance companies to become one. Even worse, that law prevented the SEC from regulating or even investigation bank holding companies.
The AIG fiasco is a prime example of the mess Bill created (which Hillary supports). Briefly, in most cases of insurance, an insurer underwrites and rates its risk, say on house fire losses. It knows that one out of 100 houses will burn down in any year. So, it charges its 100 customers enough to pay for that loss, plus overhead, salaries, profit, etc. THAT money is set aside as a "reserve." When the loss comes, the insurer has enough money stored away to pay for the loss.
Except when AIG insured the gambling on mortgages that was concocted by the likes of GOLD, man Sucks, and other financial giants (made huge by Bill), it NEVER SET ASIDE A SINGLE PENNY FOR RESERVES. Goldman got to say, "Hey, these are insured investments. We have AIG insuring them." AIG got to make incredibly huge profits on this line of business, since it paid nothing into a reserve. AND AIG never bothered to reinsure their own exposure. (Reinsurnace is a way of spreading risk, with other companies buying up part of the risk for a share of the profits) So when the first loss came in, AIG was out in excess of 150 BILLION with no cover, no assets, and no ability to pay. The US came in and bailed them out to the tune of $187 BILLION of taxpayer dollars, meaning that AIG kept its ill-gotten gains, Morgan Stanley was repaid from dollar 1, as was GoldMan Sucks for gambling huge on stuff they knew was going to fail.
All of that fiasco was due to Bill signing that statute into law. And Hillary supported it then, and supports it now. Bernie was one of the lone voices predicting this mess. He was chastised for not being "modern enough" about the world of finance.