Rachel's show in 2009: Dorgan warned us 1999 on the repeal of Glass Steagal.

[madfloridian]

Last edited Mon Feb 25, 2013, 12:24 AM - Edit history (1)

This was posted in 2011. Rachel Maddow interviews Byron Dorgan on his warnings about the repeal of Glass Steagal.

Byron Dorgan's words in 1999

Consequences of Glass-Steagall repeal

“I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010. I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness."

Sen. Byron Dorgan (D;ND), one of 7 Democrats who voted against the Gramm-Leach-Bliley Financial Services "Modernization" Act of 1999

Here is more from Dorgan in the NYT in 2009:

10 Years Later, Looking at Repeal of Glass-Steagall

Mr. Dorgan still feels the same way. “I thought reversing Glass-Steagall would set us up for dramatic failure and that is exactly what has happened,” the senator told DealBook on Thursday. “To fuse together the investment banking function with the F.D.I.C. banking function has proven to be a profound mistake.”

Also from the NYT, look at the lopsided vote. I would say we can pretty much blame bipartisanship for this fiasco.

But 10 years ago, the revocation of Glass-Steagall drew few critics. In the House, 155 Democrats and 207 Republicans voted for the measure, while 51 Democrats, 5 Republicans and 1 independent opposed it. Fifteen members did not vote.

[elleng]

1. and President Clinton said:

CLINTON: Well, I think on the derivatives – before the Glass-Steagall Act was repealed, it had been breached. There was already a total merger practically of commercial and investment banking, and really the main thing that the Glass-Steagall Act did was to give us some power to regulate it – the repeal. And also to give old fashion traditional banks in all over America the right to take an investment interest if they wanted to forestall bankruptcy. Sadly none of them did that. Mostly it was just the continued blurring of the lines, but only about a third of all the money loaned today is loaned through traditional banking channels and that was well underway before that legislation was signed. So I don’t feel the same way about that.

I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go. I think if Arthur Levitt had been on the job at the SEC, my last SEC commissioner, an enormous percentage of what we’ve been through in the last eight or nine years would not have happened. I feel very strongly about it. I think it’s important to have vigorous oversight.

http://crooksandliars.com/susie-madrak/president-clinton-i-was-wrong-listen

[madfloridian]

2. Clinton admitted he was wrong to listen to Rubin, Summers.

From your link:

"In an interview on This Week with Jake Tapper, President Bill Clinton said he made a mistake listening to Bob Rubin and Larry Summers on derivatives, and said he should have tried to regulate them, despite Republican opposition"

He should have vetoed.

[elleng]

3. Right, I didn't post the entire piece.

Not only should he have vetoed, he should have objected throughout the process.

[madfloridian]

4. Amen to that.

[Festivito]

8. What? For show? There were enough votes to override a veto.

The only thing he would have from a veto is less time to start regulating it, maybe setting a good pattern of regulation on a bad idea.

It looks more like a driving decision whether to hit a brick wall or a parked car. Whichever one hits, in retrospect, one can regret not having made the other choice.

[DallasNE]

5. Two Words: "Christopher Cox"

When Bush nominated Chris Cox to head the SEC I said at the time that he must be opposed by all means available, including a filibuster. This was not an easy call because I believe administrations should have wide latitude in appointing their own people and thus deserve an up or down vote. Cox is the only exception I have made to that standard - ever. Sadly, he sailed through and the rest is history. Cox was a life long deregulator and putting him in charge of a regulatory body was certain to have disastrous results and was the basis of my alarm bell. But nobody was listening. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPus5C5B.JhQ

[DeSwiss]

6. You can't ''unrotten'' the apple.

- K&R

[sigmasix]

7. Gingrich speech

Wasnt this the same legislation that Gingrich speech-ified on in congress? Didnt he claim this legislation would unleash American free market spirit, or some shit. Didn't Gingrich also claimed that American bankers had learned thier lesson and would never do something to damage the entire economic system; that Americans could trust the bankers. I remember many politicians claiming this legislation was needed- But all of the active, vocal support and assurances came from leading right wingers, not progressives. Shouldn't the partisans that assured Americans about the need for this legislation bare the bulk of responsibility for the failures in our finacial system that can be attributed to this legislation? Right wingers always seem to find someone else to blame for the damage they cause. Does anyone else remember Gingrich giving a speech that was in earnest support of this legislation?

[onwardsand upwards]

9. There's always money to be made from eliminating regulations ...

... and always politicians ready to take money to do the deed.

Politicians are paid peanuts, relative to corporate executive salaries, and they line their pockets by doing what corporations dictate.

Glass-Steagall was an obstacle to quick bucks for the few, to avert disaster for the many. In the 1930s, the political system had enough legitimacy to put GS in place. Today, even after the GFC, there is not enough legitimacy in the system to do anything remotely similar.

But then came Elizabeth Warren ...