In Sunday night’s interview with the Obamas on 60 Minutes, the president-elect was asked if he would push for more financial regulation.
Yes, he said. It’s a top priority. "And keep in mind that the deregulation process, it wasn’t just one party. I think there’s a lot of blame to spread around."
Really?
Deregulation of the financial industry – the reign of anarchy destined to blow up the markets and the global economy — started in 1999 with repeal of the 1933 Glass-Steagall Act. Clinton was president, but Republicans controlled congress. In the Senate, all 53 Republicans voted for repeal along with exactly ONE Democrat. That opened the gates to the orgy of lax supervision and non-supervision of bankers and Wall Street freebooters.
Throughout this feeding frenzy, apostles of deregulation have overwhelmingly come from the hardcore, ideological right wing, egged on by financial industry lobbyists.
And for nearly eight of these nine years, the Bush administration has not only been obliterating federal oversight of the markets but also failing to enforce even the patchy and often toothless regulations still on the books – and firing or demoting any honest civil servant who actually tries to do his job.
Not just one party? Let’s not get so reasonable and so ritualistically consensual that we lose track of reality.
Sure we all share some responsibility – for everyone and everything – but real crimes are committed by real criminals, and the more quickly you forget the sooner they’ll do it again.
These Republican outrages have cost countless people their jobs and their homes and cost millions of others their peace of mind and the ability to take good care of their families.
Right winger (now rich lobbyist) Phil Gramm, John McCain’s "financial guru," engineered the Enron Loophole when he was in the Senate – exempting energy trading from regulators, leaving Enron free to rape the ratepayers and taxpayers of California – after which his wife Wendy joined Enron’s Board.
Gramm was also the principal enabler of the subprime mortgage meltdown.
Mother Jones has dubbed him Foreclosure Phil. He sneaked a measure into the 2000 budget at the last minute — largely written by financial industry lobbyists and unread by most of the Senators voting on the budget – barring the SEC and the Commodity Futures Trading Commission from regulating exotic swindles like bundling worthless mortgages.
Meantime Henry Paulson (yes, that guy), then head of Goldman Sachs, was after the SEC to get rid of some silly regulation that prevented investment bankers and hedge funds from using leverage up to 40-1 (You invest 10 million to control 400 million. You can make a fortune, and if later the investment goes bad, you get a bailout and the taxpayers have to cover your losses while you go home to count your accumulated bonuses). At that time the limit was 15-1, or 1,500% — fairly ample, wouldn’t you think?
Paulson didn’t get what he wanted from Clinton’s SEC chairman Arthur Levitt. But when Bush appointed Christopher Cox to the post, he soon gave the all-clear for the insanity of 40-1 leverage, and the stage was set for the meltdown. Culprits? No Democrats. All Republicans. Typical Bush.
By late 2007, it was obvious that predatory lending practices were a growing threat to the mortgage market and to people buying houses. The situation was so clearly dangerous that the attorneys general of all fifty states – Republicans and Democrats alike – filed lawsuits against the worst of the predatory lenders (those folks who, for example, were steering borrowers with sterling credit ratings into expensive and potentially dangerous subprime mortgages – which, later, could easily cost them their homes — because the subprimes were much more profitable and, well, you know, that’s one version of capitalism).
What happened? The Bush administration dug out an obscure 1863 law to suppress all of the states’ anti-predatory lending laws and prevent them even from enforcing their own consumer protection laws in suits against national banks. No, Mr. Obama, this was no bipartisan everyone’s-to-blame, let’s-not-quibble misunderstanding.
It was callous, aggressive Bush administration collusion with bankers, mortgage brokers, and investment bankers who were cheating consumers and investors and endangering homeowners.
The same kind of anti-regulatory zeal pervaded the whole Bush regime, whether in failing to protect consumers against floods or dangerous drugs or contaminated food or polluted air and water or losing precious natural resources or constitutional rights. It was definitely not bipartisan; in fact it was often a flagrant process of reversing the regulatory actions taken under Clinton — e.g., Bush non-regulators telling utility companies to forget those smokestack scrubbers they had agreed to install.
So, sure, let’s be reasonable and reach across the aisle and focus on the future.
But let’s not fudge the facts about who’s to blame. Where there are crimes, let’s prosecute. And let’s never forget.