Clinton says repealing Glass-Steagall bill in 1999 didn't cause this problem?

[futurebeachbum]

There is an interview with Bill Clinton in BusinessWeek where he defends the repeal in 1999 of Glass-Steagall act of 1933. (This was the act that formed the FDIC and kept banks from also being involved in high risk, speculative ventures.) I don't know why anyone would worry about banks acting imprudently?

Of course, he carefully avoids mentioning that at the same time his Administration was coming down hard on the mortgage industry and threatening Federal action if they didn't start financing homes for people who weren't qualified to own them.

We are now seeing a massive CYA activity on both sides of the aisle.

The Republicans ran the Congress in 1999 when this happened, so they are clearly co-conspirators in the effort. The interesting thing is the names of some of the Democrats that voted for it as well: Dodd, Edwards, Kennedy, Kerry, Reid, Biden and Schumer.

They all do their owner's bidding and we are screwed....

 

[mossyhead]

Sept. 30, 1999 NY Times Article

This is an article from the NY Times concerning Fannie Mae.

http://query.nytimes.com/gst/fullpa...ec=&spon=&&scp=1&sq=September 30, 1999&st=cse

 

[traderx]

PBS has an excellent time-line summary of the Glass-Steagall Act and its demise. As you read the summary, the dirty word "lobby" keeps popping up.

Some interesting tidbits from the summary:

After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.
On Oct. 21, with the House-Senate conference committee deadlocked after marathon negotiations, the main sticking point is partisan bickering over the bill's effect on the Community Reinvestment Act, which sets rules for lending to poor communities. Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.
On Oct. 22, Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.
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?"

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