Molly Ivins warned us about the repeal of Glass-Steagall in 1999. Yes, Phil Gramm's responsible.

[flpoljunkie]

Molly Ivins October 26, 1999

AUSTIN, Texas — I feel vaguely like Henry Higgins in "My Fair Lady," announcing with gleefully inhumane relish: "She'll regret it, she'll regret it! Ha!"

"I can see her now, Mrs. Freddy Eynsford-Hill, in a wretched little flat above the store!

"I can see her now, not a penny in the till, and the bill collectors knocking at the door!"

Which is to say, the new banking bill is a thoroughly lousy idea, and the party most likely to regret it is us.

The 1999 Gramm-Leach Act is about to replace the 1933 Glass-Steagall Act, with the result that bankers, brokers and insurance companies can all get into one another's business. It's a done deal except for the final vote on the conference-committee agreement. The inevitable result will be a wave of mergers creating gigantic financial entities.

"Too Big to Fail" will be the new order of the day. And guess who gets left holding the bag when they're too big to fail? One of these monsters goes down, and it will cost as much as the whole S&L debacle.

http://www.creators.com/opinion/molly-ivins/molly-ivins-october-26-1999-10-26.html

And, yes, Molly Ivins also warned us about Phil Gramm's Commodity Futures Trading Act, a 262-page amendment which he slipped into an omnibus appropriations bill moving toward passage as Congress was preparing to head home for the Christmas recess in 2000.

Last Minute Christmas Gifts for Us
by Molly Ivins
December 24, 2000

Just before it left town last week, Congress passed a little horror called the Commodity Futures Modernization Act of 2000, brought to us courtesy of heavy lobbying by Wall Street banks and investment brokers.

Frank Portnoy, writing in The New York Times, describes the bill thusly: "First, it lifts a long-standing ban on futures trading in individual stocks, thus allowing investors to buy shares through brokers with very little money down. Second, it protects a lucrative business for bankers — the private financial contracts known as swaps — from being regulated. ... Investors are affected by swaps because they are ... used by many mutual funds and publicly traded companies."

http://www.creators.com/opinion/molly-ivins/molly-ivins-december-24-2000-12-24.html

[blm]

1. Why didn't the greatest political communicator of a generation lead a battle to fight Gramm on

this at the time? Why not go to the public and explain how the GOP was leading them off a cliff on this? He was the only Dem who COULD command television camera time for battles like this, yet he didn't.

[beachmom]

3. Bill Clinton and his economic team were FOR it, that's why.

He signed the damned thing into law.

[depakid]

4. The head of Obama's team was for it, too

along with numerous other deregulatory measures that they were warned about:

http://crookedtimber.org/2008/10/09/brooksley-born-and-alan-greenspan/

[beachmom]

9. Yup. The GOP led the effort, but boy did the Democrats go along.

That doesn't mean they haven't recognized the err of their ways. Bill Clinton did say he regretted the Commodities bill.

[blm]

10. Sure he regrets it...did Bush2 and 9-11 make him regret deepsixing BCCI? No.

Bill knew exactly what he was doing for his fascist benefactors in the 90s and throughout the past 8yrs of his support for Bush2.

Does anyone think Bill was just too intimidated by Gramm's intellect and charisma to challenge him on this bill?

[beachmom]

14. I guess the question is how Gramm's bill got put into a giant Omnibus bill.

Shouldn't something this important have been debated on on its own?

[niceypoo]

34. The final version of the bill passed by the Senate 90-8 and by the House 362-57

Most Dems were for it, not just Bill Clinton. Do a minimum of research before opening your meat flapper.

[blm]

39. For the overall bill FOR their Dem pres - you know Bill didn't lead a battle against Gramm measure

because he was FOR it, and he was the ONLY Dem who could have commanded the press coverage to lead that fight publically. You are welcome to pretend otherwise and that he was a helpless victim of Gramm, the GOP and the Dem party he led.

[Baby Snooks]

63. He still signed it....

People really need to wake up - the only Democrats and Republicans are the fools who believe there are Democrats and Republicans on the ballot. The majority party in Congress is the Republicrat Party.

DINOs and RINOs = Republicrats.

[lumberjack_jeff]

42. The elected officials who are as smart as Molly are a minority in our party.

The fact that they're nonexistent in brand-x is cold comfort.

[FailureToCommunicate]

27. Bill had little choice: By 1999 there was an veto proof Republican majority in

Congress. The bill passes no matter what. Besides Bill and the M$M were distracted at that time by a cheap perfume operative named Monica Lewinsky and her "pal" Linda Tripp...

[blm]

30. Bush would've challenged a Dem majority in a full court press against a bill he didn't want.

Bill was the great communicator - be honest - he NEVER challenged the GOP when bills like this came up. The idea of Bill Clinton being 'helpless' bystander on bills he signed is absurd. You think a charismatic sitting president couldn't have challenged the troll Gramm to publicly debate the bill before the vote?

[FailureToCommunicate]

41. Hindsight is 20/20 on this bill ruining Western Civilization. There was so little

opposition then that folks today - now that we're all experts on esoteric economic instruments - have to be reminded this bill even happened.
Ask five friends if they have any idea what "Glass-Steagall" was, and why it's relevant today.
Folks don't care till their own saving accounts takes a nosedive.
And certainly not enough voted in elections where Republican swindlers got into office.

[blm]

46. So, Bill never led a Dem capitulation to deregulation in the 90s, but, if he did it was only because

'no one could have known' what catastrophe would ensue down the road? Sounds familiar.

[TayTay]

32. So you are saying this bill was signed because

the President was powerless to stop his hand from signing it? Pres. Clinton was unable to give a damn and decided not to veto this because, well, it would have passed anyway?

And you think this is morally defensible behavior?

[FailureToCommunicate]

38. I certainly DO NOT think it was "morally responsible behavior" by Clinton, but

then, lets face it, he had issues with "morality" I was merely pointing out that a lot of progressive legislation that MIGHT
have helped America recover from the 12 years of destruction by the two previous Republican presidents, Reagan and Bush Sr, got blocked by
the Republican majority in Congress that was busy investigating Whitewater and Lewinsky, etc.

[blm]

40. That Republican majority existed because Bill deepsixed BCCI matters that should've exposed GOP

bigwigs of the past administrations as traitors to their country and to democracy itself.

But, then, Poppy Bush, Jackson Stephens and their Dubai and Saudi royal cronies needed protection, didn't they?

[FailureToCommunicate]

45. Say what? BCCI? BCCI was liquidated in 1991 before Clinton was President.

John Kerry reported on BCCI in '92 and the bill "Public Interest Disclosure Act (PIDA) was passed in 1998 to make it harder for monsters like that one to rise up.
Or am I missing something?

[blm]

47. Yes, you're missing something. Kerry's Dec1992 BCCI report had a list of outstanding matters

that was handed to incoming President Clinton and there was a specific point made that there was further scrutiny NEEDED. What did Clinton do with the list?

You are welcome to use Bill's book and tell us what he has to say about it. Good luck finding one word about BCCI in his entire book though many of the figures named in the BCCI report have popped up in serious matters since (Bin Ladens, AQ Khan).

BTW...you do know that BCCI at its core was about the international financing of global terrorism through drugrunning, moneylaundering, armsdealng and nuclear proliferation, don't you? But, let's not forget also that Stephens' dealings with the Chinese (via BCCI) that grew Walmart into a fascist's dream.

Do you think Bush's legal fixers went into Rose Law Firm for 2yrs to examine the paltry dealings of HRC on Whitewater or to scrub the files of Rose's biggest client Jackson Stephens? You do know that Stephens was the man who brought BCCI into the US for his longtime pal GHWBush, don't you?

Sorry, but, there should never have BEEN a Bush2 possible, or a 9-11 event - BCCI matters fully revealed in the 90s would have assured that.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=2870996&mesg_id=2870996

[frylock]

51. well played..

there are a lot of ill informed folks around here when it comes to BCCI.

[FailureToCommunicate]

53. "less informed" perhaps, but hardly "ill-informed"

[FailureToCommunicate]

52. Fine. Thanks for taking the time to help us understand the history a little better.

[blm]

55. Not really anyone's fault - corpmedia certainly never allowed public to understand the import of

BCCI - too many major players involved in the operation and the coverups.

IranContra, S&L failures, Iraqgate, and CIA drugrunning were actually parts of the BCCI story and this nation has been stuck dealing with the consequences of those illegal, fascist operations AND the coverups ever since.

[FailureToCommunicate]

59. Thanks for the link. Jaw dropping, indeed. Anyone done a book or...? on this subject?

[kaygore]

56. Clinton was the best Republican president of the 2nd half of the 20th Century

The only reason he got the debt under control was Gore. That's why the people in power could NOT let Gore get elected.

[tooko13]

64. Correct!!!

You are correct. The Clintons are corpratists.

[blm]

68. Gore never gets the credit on that - I remember clearly that he streamlined government

and trimmed the waste with no fanfare and no acknowledgement afterwards.

[annabanana]

2. I miss Molly Ivins

What a great voice she was.

[mikekohr]

11. Molly was/is one of America's unsung heroes

The dark shadow of her passing is brightly lit by the shining example of her life. Her wit, humor and intelligent, reasoned reporting helped shine a light in two very dark places, George Bush's empty head and Dick Cheney's black heart.

mike kohr

[blue neen]

16. .

:thumbsup:

You nailed it.

[davidwparker]

5. Rec'd for Molly's insight and yet another example of Clinton selling us down

the river.

[FailureToCommunicate]

28. See post #27... above

[AlbertCat]

35. 20/20 hindsight

It may have been obvious to Molly Ivins, but you all forget DC is on another planet. I'm serious. These people are clueless for the most part. Their concerns are very narrow. (like all we hear about today are bonuses. There are other things too.)

And you all forget what the atmosphere was like then. The Dems were much like the Repugs now. Crazy-minority. Notice the different responses to being "in exile" from each party. Repugs dig in deeper, Dems don pink tutus. (Look at all the Repugs all worried about deficits now, and all outraged over the behavior on Wall Street. A complete 180 from even a few months ago....as Rachel Maddow pointed out on her show last night. Now remember Dems all worried about Bill Clinton's penis along with the Repugs.)

But still....all these things are still just excuses. The times were different and the "feel" was different. It would've taken someone above it all.... the towering BS at the time....to do the right thing. That's what we expect now....but not then. Remember, at the time even the Dems weren't supporting Clinton.

Excuses...

[moundsview]

6. There was a guy here last year that kept pointing this out

I think he finally got TS'd because he also pointed out the complicity of the Democrats in this mess, I guess that's not acceptable.

ben_meyers (1000+ posts) Sun Jun-01-08 04:19 PM
Response to Original message
9. It's the Deregulation, Stupid
Edited on Sun Jun-01-08 04:20 PM by ben_meyers
Laws passed to prevent what led to the 1929 crash and subsequent depression, Glass-Stegal Act, were repealed in 1999. The deregulation of the financial industry has resulted in what we have today.

From Mother Jones, a must read.


Commentary: Democrats from Carter to Clinton helped roll back the government's regulatory power, but as the economic crisis deepens, "regulation" is no longer such a dirty word.

By James Ridgeway

March 28, 2008

Speaking at Cooper Union in New York City on Thursday, Barack Obama went where few Democrats have dared to go in the past quarter-century: He made a case for more regulation. As part of a speech on his economic platform, Obama depicted the current economic crisis as a consequences of deregulation in the financial sector. "Our free market was never meant to be a free license to take whatever you can get, however you can get it," he said. "Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one—aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight."

This is quite a statement from a candidate who's received $6 million in campaign contributions from securities and investment firms, just slightly less than rival Hillary Clinton, who cashes in at $6.3 million. Obama's criticism was sharp, but his six-point plan for rebuilding a regulatory structure was short on both details and teeth, and relies on the Federal Reserve, which is like having the fox guard, well, the other foxes. Still, his use of the r-word signals what is at least a rhetorical departure for a party that has been running from regulation for decades.

Obama isn't the only one. Last week at the Greater Boston Chamber of Commerce, Massachusetts Democrat Barney Frank, chair of the powerful House Financial Services Committee, also argued that years of banking deregulation were in part responsible for creating the subprime mortgage crisis and the larger economic downturn, which he didn't hesitate to call a recession. He talked about the need to impose more "discipline" on investment banks, requiring a higher level of capitalization and transparency. Frank called on Congress to consider establishing a "Financial Services Risk Regulator" that would have "the capacity and power to assess risk across financial markets" and "to intervene when appropriate."

http://www.motherjones.com/commentary/columns/2008/03/d...
http://www.streetsmartreport.com/school/Commentaries/My...

http://upload.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3372157#3372330

[wroberts189]

7. please forgive my language but fck'n KNR nt

[Triana]

8. Oh now THERE'S a surprise. (not). Gramm is another one of those dirtbags whose hand..

...is in most anything that's disasterous, dishonest, sneaky, greedy, self-serving, hypocritical, and assinine.

[Bennyboy]

12. I miss Molly.....

She knew what the hell was going on. This is great post, thanks a lot..

[Laelth]

13. Bill Clinton signed the repeal, and Molly was right (as usual).

Here's to the late, great Molly Ivins.

:toast:

:dem:

-Laelth

[MadMaddie]

15. Man Molly nailed it

how prophetic

<snip>
"Too Big to Fail" will be the new order of the day. And guess who gets left holding the bag when they're too big to fail? One of these monsters goes down, and it will cost as much as the whole S&L debacle.
<snip>

[progressoid]

17. Error: You've already recommended that thread

Well dammit, it deserves an extra rec.

[blue neen]

18. Perhaps Jon Stewart could have Phil Gramm on as a guest on his show.

Then, maybe, just maybe, the corruption complicit media would pay attention.

I wish I could recommend this thread WAY more than once.

[valerief]

26. I'd love to see a horde chase Gramm into a closet like they did Jeb.

I'd like a more satisfactory outcome, though.

[Canuckistanian]

19. If ever you could say that one person was responsible for this mess, It's Gramm

And Molly warned us about him at the time. And quite prophetically.

It's a damned shame, too. On ALL politicians.

[Enthusiast]

20. K&R! We loved Molly!

I remember reading her outrage at this legislation back then. Then, like everyone else, I forgot completely about it until this recent collapse. Molly was a true treasure.

[nomaco-10]

21. Here's a great article from motherjones exposing Gramm...

He should be sharing a cell with Madoff.

http://www.motherjones.com/politics/2008/05/foreclosure-phil

[whathappened]

22. scams

seems like the dirty-er u are the more important u are in dc anymore

[flpoljunkie]

31. Thanks for the link. A must read.

[disndat]

43. I hope Sen Charles Schumer

doesn't get a free pass on this Wall St. meltdown. He was as aggressive as Phil Gramm on deregulating, even over the heads of see-no-evil, hear-no-evil S.E.C.

[BrklynLiberal]

60. I would not vote for Schumer in a one man race...

[polichick]

23. Elizabeth Warren just spoke about the importance of Glass-Steagall on Morning Joe...

I truly hope that the President has talks with this woman (Chairman of the Congressional Oversight Committee; Harvard Professor) ~ she's the best I've heard on the subject of how we got here and what to do next.

[flpoljunkie]

66. Me, too. Warren was great! Obama mentioned her specifically yesterday at the Costa Mesa townhall.

Q. Since American taxpayers have had to bail out a lot of large banks -- Citibank, et cetera -- and they don't feel they've gotten any benefit for themselves, do you support caps on interest rates that the same companies we have bailed out with our money can charge regular consumers on credit cards? Because it's up to 30 and 40 percent. (Applause.)

THE PRESIDENT: It's a great question. It's a great question. It's a great question. This was a really good question. First of all -- first of all, I generally support a credit card bill of rights, even -- setting aside the whole issue of TARP and who's been getting TARP and who hasn't been getting TARP. The truth of the matter is that the banking industry has used credit cards and pushed credit cards on consumers in ways that have been very damaging.

There's a woman named Elizabeth Warren who's a professor at Harvard who did a great deal of study around this. And she made a simple point. You know, if you bought a toaster, and the toaster blew up in your face, there would be a law, a consumer safety law, that would protect you from buying that toaster. But if you get a credit card that blows up in your face, that starts off at zero-percent interest, and once they kind of suck in the -- buying a bunch of stuff and suddenly it's 29 percent; and if you're late two days, suddenly, you know, you just paid another $30, and all kinds of fine print that a lot of folks didn't understand -- well, somehow that's okay.

So just putting aside the issue of TARP, I think generally having some consumer safety, some consumer protection around credit cards, is important. Now, all of us -- I think a lot of people have learned their lesson with credit cards. And credit cards can be an important convenience. But generally speaking, if you're just running up your credit card and you don't think that there's a bill to be paid, you've got problems. So all of us, I think, have to be more thoughtful about how we use them, and ultimately we've got to take responsibility if we are going on shopping sprees that we can't afford.

On the other hand, it's also important that we have consumer safety laws, and that's something that I want to promote and get done as President of the United States.

[1776Forever]

24. This is the root of the evil of this problem - The bonuses are a symptom of this disease of greed!

Thank you for posting! This shows the great reporting that lives on long after Molly left us. I just sent this to a few radio and TV talking heads.

:kick:

[carlos3k]

25. I (heart) Molly

Bushwacked is a great down home account of the rise of GWB. "Dance with them that brung ya". I wish she were were if only to say naa naa na boo boo.

[BlueJac]

29. Bill and his shills helped!

[WarhammerTwo]

33. Can't Congress...

...repeal the asinine Gramm-Leach act? Can't we write and call them and get them to do this? It won't clean up the mess we have but it will stop it from happening in the future. I also don't understand why Congress isn't forcing ALL the corporate giants to pull a Ma Bell and spin off into smaller entities. I'm talking about car companies, banks, pharmaceuticals, oil companies and umbrella corporations like Altria which own Philip Morris, Miller Brewing and up until 2007, Kraft foods. Yup. That's right. When you were buying Oscar Meyer wieners for the kids, you were actually supporting a tobacco and alcohol company too. That way, if one fails, the sky won't fall down on us like it is now.

And all these idiots who thought if a company gets so big, it can't possibly fail, need to be drug out into the street and given 40 lashes with a wet noodle (sorry but my Christian beliefs won't allow for violence although I'll definitely accept prison time for these yahoos). These short sighted dimwits who never thought the worse case scenario could ever happen need to be driven out of power and never be allowed to make decisions more important than whether or not they want to super size their value meal.

Seriously though, can't Congress ground Gramm-Leach into dirt and restore Glass-Steagall? I imagine it wouldn't be that difficult now with all this populist outrage swarming about their constituents.

[AlbertCat]

36. Stocks and bondage

need to be drug out into the street and given 40 lashes with a wet noodle (sorry but my Christian beliefs won't allow for violence although I'll definitely accept prison time for these yahoos

**********

Bring back stocks! (The kind you wear around your neck and ankles, not Wall Street stocks....or 18th century neckwear.)

Stocks for stockbrokers!

[WarhammerTwo]

37. Now that's a great idea!

And I don't think anyone would find such punishment to be cruel or unusual.

[SOS]

44. "Nobody could have seen this coming"!

Except Molly Ivins, Frank Portnoy and anyone else who was paying attention in 1999.

Wall Street lobbied for this. They purchased it from their lackeys in Washington for cash.
Now let them live with it in a bankruptcy court.

[flpoljunkie]

48. You obviously don't understand bankruptcy is for those who are not 'too big to fail.'

:sarcasm:

[bluescribbler]

49. I miss Molly so much

Fortunately, we still have Nance Greggs. Too bad she's not syndicated.

[Senator]

50. A PBS Frontline G/S Timeline

The last http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html">entry in the timeline:

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

In hindsight, even that would have been better than bushcheney stealing it -- then pissing it all away.

--

[FailureToCommunicate]

54. Great link, thanks!

[sallylou666]

57. Molly warned us about everything

I wish Molly was here to say I told you so.

[ihavenobias]

58. K & R. Does anyone know how Molly's awesome criticisms were handled at the time?

How was she dismissed? Did they say she wasn't qualified to make these claims? At any rate, I'm sure the same bastards that ripped her for this are now saying "no one could have seen this collapse coming!".

[BrklynLiberal]

61. The MSM did what it always does with unpleasant truth...IGNORED IT. Marginalized the speaker.

[BrklynLiberal]

62. Molly Ivins was brilliant, witty, insightful and she is sorely missed, every single day.

She was a Cassandra of modern times...

Cassandra's prophecies were true, yet fated to be ignored.

The Cassandra syndrome used to denote people who get either good advice on a subject or a warning of impending disaster but fail to heed or even acknowledge it because of its source, or the prejudices of the recipient of the warning.

[antimatter98]

65. Clinton signed the bill and Larry Summers as Treasury Sec., loved it.

Summers is quoted in a 1999 NYT article saying essentially that
finally, we were now going to do away the antiquated financial regulations
of the past, and were moving forward with the Glass-Stegall repeal, to a
modern 21st century economy. Summers said that this new era would be
great for the nation and for business.

And today, Summers is leading Obama's econ. team.

[sohndrsmith]

67. more on this, (and AIG-FP based in CT, fwiw):

One thing I don't understand - how the NY Fed/Geithner is/was culpable for the TARP rules under Bush/Paulson - even those issues incorporated into the secondary (tertiary) provisions of ARRA/Stimulus? Bernanke's isn't being challenged, even upon Liddy's testimony that he was an active participant?

Maybe I'm just dumb or don't understand how this works, but I'm confused about where and when the blame (and subsequent finger pointing) is being directed.

---------

Excerpts (link to full text below):

THURSDAY, MARCH 5, 2009

TESTIMONY TO THE UNITED STATES SENATE COMMITTEE ON BANKING,
HOUSING AND URBAN AFFAIRS HEARING ON:

"AIG: Examining What Went Wrong, Government Intervention, and Implications for Future Regulation."

BY Superintendent Eric Dinallo:

I would like to thank Chairman Christopher Dodd, Ranking Member Richard Shelby and
the members of the Senate Committee on Banking, Housing and Urban Affairs for
inviting me to testify today at this hearing on “American International Group: Examining
what went wrong, government intervention, and implications for future regulation”.

The New York Insurance Department is not and never has been the primary regulator for
AIG.

The crisis for AIG did not come from its state regulated insurance companies. The
primary source of the problem was AIG Financial Products

Federal Reserve Chairman Bernanke recently said, “AIG had a financial products
division which was very lightly regulated and was a source of a great deal of systemic
trouble.”

The main reason why the federal government decided to rescue AIG was not because of
its insurance companies. Rather, it was because of the systemic risk created by Financial
Products.

By purchasing a savings and loan in 1999, AIG was able to select as its primary regulator
the federal Office of Thrift Supervision, the federal agency that is charged with
overseeing savings and loan banks and thrift associations. The Office of Thrift
Supervision is AIG's consolidated supervisor for purposes of Gramm-Leach-Bliley.

---

Note: The bills were introduced in the U.S. Senate by Phil Gramm (R-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),

----

link to full text:

http://74.125.95.132/search?q=cache:-utJ6mfJRbwJ:www.ins.state.ny.us/speeches/pdf/sp0903051.pdf+did+NY+Fed+regulate+AIG-FP&cd=10&hl=en&ct=clnk&gl=us