Thursday, March 26, 2009

The Kings of Deregulation

Did anyone see it coming? The economic crisis that we all face. Remember, one day money was freely flowing and then the next day we were told that the sky was falling.

It seems that Sen. Byron Dorgan (D-N.D.) saw it coming back in 1999. That's when he voted against the Gramm-Leach-Bliley Act, named after Sen Phil Gramm. Back then, not only did Republicans support deregulation but Democrats did too. This bill had the full support of President Clinton, Bob Rubin and Larry Summers.

Let's not forget about the Glass-Steagall Act. It was the Gramm-Leach-Bliley Act that repealed the Glass-Steagall Act and many of the protections put in place after the Great Depression. This was all under the watch of Republican Democratic President Bill Clinton.

Many believe
that the major cause of the current banking meltdown was the 1999 repeal of the Glass-Steagall Act.
The Glass-Steagall Act, passed in 1933, mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation. It worked fine for fifty years until the banking industry began lobbying for its repeal during the 1980s, the go-go years of Reaganesque market fundamentalism, an outlook embraced wholeheartedly by mainstream Democrats under the rubric "neoliberalism."

This disgraceful bow to the banking industry, eagerly signed into law by Bill Clinton in 1999, bears a major share of responsibility for the current banking crisis.
Sen. Byron Dorgan was recently on The "Rachel Maddow Show" and spoke about those who got deregulation terribly wrong -- and the small handful who saw the disastrous consequences coming a decade ago. Dorgan also spoke of the need for regulation. Watch:

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