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Here we go again, redux...

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1 Here we go again, redux... on Fri Jun 09, 2017 8:55 am

"The House of Representatives on Thursday passed sweeping legislation to strip and replace much of the financial regulations passed under President Obama after the 2008 financial crisis."
http://thehill.com/policy/finance/337004-house-passes-sweeping-bill-to-strip-post-recession-banking-rules

What no one wants to admit is that the lust for financial deregulation can be laid flat in the lap of Bill Clinton and his wife, "The Travelin' Trollop o' Hanover Street".

In 1999 Clinton signed the Gramm-Leach-Blilley Act which repealed most of Glass-Steagall, the 1932 Act which separated investment banking from commercial banking and prevented a re-occurrence of the banks failures of the depression.

Gramm-Leach-Blilley led directly to the 2008 financial crisis.

Here's Nobel Prize winning Economist Joseph Stiglitz on the connection:

The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act—the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest. For instance, without separation, if a company whose shares had been issued by an investment bank, with its strong endorsement, got into trouble, wouldn’t its commercial arm, if it had one, feel pressure to lend it money, perhaps unwisely? An ensuing spiral of bad judgment is not hard to foresee. I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest—toward short-term self-interest, at any rate, rather than Tocqueville’s “self interest rightly understood.”
http://www.vanityfair.com/news/2009/01/stiglitz200901-2

And now the Republicans want to do it again.

What could go wrong?

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2 Re: Here we go again, redux... on Fri Jun 09, 2017 9:57 am

There has to be common sense rules and regulations that aren't thousands of pages long and seeded with loopholes. Either a practice is ethical... or it's not. The only reason to complicate it is to deceive.

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3 Re: Here we go again, redux... on Fri Jun 09, 2017 11:06 am

del.capslock wrote:"The House of Representatives on Thursday passed sweeping legislation to strip and replace much of the financial regulations passed under President Obama after the 2008 financial crisis."
http://thehill.com/policy/finance/337004-house-passes-sweeping-bill-to-strip-post-recession-banking-rules

What no one wants to admit is that the lust for financial deregulation can be laid flat in the lap of Bill Clinton and his wife, "The Travelin' Trollop o' Hanover Street".

That is a lie. He may have signed the bill, but Gramm, Leach and Blilley were all Republicans. And if you will recall, Bill Clinton had been under one "investigation" after another during his entire tenure.
I think he caved under the relentless pressure. At that moment, Republicans had majorities in both the House and Senate, and both chambers overwhelmingly supported it, including most Democrats. The bill was veto-proof. His signature was symbolic.

And you can stop taking cheap shots at Hillary Clinton.




In 1999 Clinton signed the Gramm-Leach-Blilley Act which repealed most of Glass-Steagall, the 1932 Act which separated investment banking from commercial banking and prevented a re-occurrence of the banks failures of the depression.

Gramm-Leach-Blilley led directly to the 2008 financial crisis.

Here's Nobel Prize winning Economist Joseph Stiglitz on the connection:

The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act—the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest. For instance, without separation, if a company whose shares had been issued by an investment bank, with its strong endorsement, got into trouble, wouldn’t its commercial arm, if it had one, feel pressure to lend it money, perhaps unwisely? An ensuing spiral of bad judgment is not hard to foresee. I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest—toward short-term self-interest, at any rate, rather than Tocqueville’s “self interest rightly understood.”
http://www.vanityfair.com/news/2009/01/stiglitz200901-2

And now the Republicans want to do it again.

What could go wrong?
While I agree with Professor Stiglitz, he certainly didn't lay the blame on the Clintons. And the G-L-B Act was followed in 2000 by the Commodity Futures Modernization Act, which further weakened consumer protections. Somehow, you've managed to leave out George W Bush's tenure and the free-for-all that ensued during those 8 years. The strongest opponent to this legislation is and will continue to be Sen. Elizabeth Warren. The GOP members of Congress must think we all have short memories and little understanding of the legalized theft that took place under the Bush administration.

And of course there were the Roaring '80's, with Reagan "lifting all boats".
What I remember most about that time period were soaring interest rates and the S&L implosion, but at least some people went to jail.

Read Matt Taibbi's GRIFTOPIA.

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4 Re: Here we go again, redux... on Fri Jun 09, 2017 11:46 am

G-L-B started the deregulation ball rolling and Bill Clinton signed it.

Of course, he was under investigation the whole time, he was a cheesy fraud who let James McDougal die in prison to save his own skin during Whitewater. He is a thoroughly dishonorable human being and his wife is worse. Actually, it will probably turn out that her defeat was the best thing that could have happened to the progressive cause.

As far as "some people" going to jail during the deregulation-caused S&L crisis, you should acquaint yourself with some contemporaneous sources. William Black, for instance. Here's what he had to say about that period on the Bill Moyers show during a discussion of 2008 deregulation-caused crisis:

The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. But even that understates the degree of prioritization, because we, the regulators, worked very closely with the FBI and the Justice Department to create a list of the top 100 — the 100 worst fraud schemes. They involved roughly 300 savings and loans and 600 individuals, and virtually all of those people were prosecuted. We had a 90 percent conviction rate, which is the greatest success against elite white-collar crime (in terms of prosecution) in history.http://billmoyers.com/2013/09/17/hundreds-of-wall-street-execs-went-to-prison-during-the-last-fraud-fueled-bank-crisis/

Thirty-thousand major felony referrals and 1000 convictions ain't exactly "some people".

Don't even go there with Taibbi. I've been touting him on this forum for months and I've been reading him since he was publishing The Exile from Russia with Mark Ames. Astonishingly enough, it was available in the periodicals section of my local library back then.

http://www.vanityfair.com/culture/2010/02/exile-201002

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5 Re: Here we go again, redux... on Fri Jun 09, 2017 12:46 pm


So, you've read GRIFTOPIA? Or Naomi Klein's THE SHOCK DOCTRINE?

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6 Re: Here we go again, redux... on Fri Jun 09, 2017 12:59 pm

Floridatexan wrote:
So, you've read GRIFTOPIA?  Or Naomi Klein's THE SHOCK DOCTRINE?  

Nice try.

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7 Re: Here we go again, redux... on Fri Jun 09, 2017 2:37 pm

del.capslock wrote:
Floridatexan wrote:
So, you've read GRIFTOPIA?  Or Naomi Klein's THE SHOCK DOCTRINE?  

Nice try.

Nice try at WHAT?

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