Soon after the passage in 1999 of the Clinton-Rubin-Summers-P. Graham deregulation of the financial industry, I boarded a US Air flight to Boston and discovered none other than then-Secretary of the Treasury Lawrence Summers a few seats away. He was speaking loudly and constantly on his cell phone. When the plane took off he invited me to sit by him and talk.
That’s the same Lawrence Summers who’s heading Obama’s National Economic Council. Makes me queasy, needless to say. Let’s see what Ralph and Lawrence had to talk about:
After reviewing the contents of this Citibank-friendly new law called the Financial Modernization Act-I asked him: “Do you think the big banks have too much power?”
He paused for a few seconds and replied: “Not Yet.” Intrigued by his two word answer, I noted the rejection of modest pro-consumer provisions, adding that now that the banks had had their round, wasn’t it time for the consumers to have their own round soon?
Lawrence said yes, set up a meeting, and nothing came of it. Surprise, surprise. Well, what did you expect?
The rest is unfolding, tragic history. The law abolished the Glass-Steagall Act which separated commercial banking from investment banking. This opened the floodgates for unwise mergers, acquisitions and other unregulated risky financial instruments. Laced with limitless greed, casino capitalism ran wild, tanking economies here and abroad.
Read the rest of the article. Let your blood boil for a moment, then sit back and realize that the geniuses who got us in this mess are who Obama’s counting on getting us out of the mess.
Well, them and his bipartisan Republican friends.
Ralph even throws in a book recommendation: “Why Wall Street Can’t Be Fixed and How to Replace It: Agenda For a New Economy” by long-time corporate critic, David C. Korten. Perhaps someone in the administration will read it. We’re running out of time, and the foxes are in the hen house.