I find it hard to stomach all the lies being spread regarding Glass Steagall, Community Reinvestment Act, GSEs, etc. There is a diary here WoW! that contains so much distortion, it is hard to begin where to start. But I will try.
1) Repeal of Glass Steagall had nothing to do with the credit crises. First, Lehman, Goldman, Morgan Stanley, Bear Stearns, AIG were never covered by Glass Steagall. Second, banks were given the right to underwrite mortgage securities in April 1987 (when, according to the GOP, Bill Clinton was running drugs out of that airport in Arkansas). Citibank (note the word "bank") had a massive mortgage underwriting operation by the middle of 1987.
2) The decision to exclude swaps from CFTC regulation did not cause the credit crises. The CFTC only regulates trading of these instruments -- they have no control over pricing, risk taking etc. The CFTC has no authority to tell a bank they can't sell credit derivatives beyond a certain level. That is the job of the Office of the Comptroller of the Currency and the FDIC -- neither of which had anything to do with the Commodity Modernization Act.
3) Repeal of Glass Steagall has nothing to do with the ability of banks to trade derivatives. Banks have been trading currency derivatives sine 1973, interest rte derivatives since 1978 and credit derivatives since at least 1993. Banks have been taking on credit risk forever. The notion that Glass Steagall prevented banks from taking on credit risk borders on the insane.
4) Repeal of Glass Steagall as nothing to with the FDIC guaranteeing derivatives. That goes back to the Reagan Administration.
5) Loans to person not of white skin had nothing to do with the credit crises. The massive lending started in 2004 -- 24 years after Jimmy Carter left office and 4 years after Bill Clinton left office.
6) Fannie Mae and Freddie Mac did not cause the credit crises. Their obligations were never the obligations of the taxpayer. Every issuing document since 1970 made that point. Whatever losses Fannie and Freddie suffered would have been the problems of those who invested in their paper -- not the taxpayer.
The facts are simple: banks went crazy in 2004 because we had an AWOL drunk in the Oval Office. The GOOPER regulators at the SEC/FDIC/OCC let the banks run amuck. When things got tough for the banks, the AWOL drunk socialized their losses onto the backs of the taxpayer. And the GOOPER have the indecency to blame everyone for their own venal incompetence. And many here lend them tacit support.
Herman Cain, Mitt Rommney, Michele Bachman, et al are liars and fools. Ronald Reagan and George W. Bush (and those who voted for them) are responsible for this mess.