Deregulation was an philosophy started by Reagan, ignored by Bush I, it returned to favor with Gingrich during the nineties, and flourished under the Republican Senate, House, and Executive branch, where it had free reign and could not be questioned or debated….

One could call it the “Bush policy’. and still remain within the bounds of reason.

But Maria,

Why on earth are you bringing up the Financial Services Modernization Act of 1999?

That bill was not one of deregulation. It just repealed the Glass-Steagall Act… allowing banks to compete against each other across state lines, to compete with other interests in the securities and insurance fields…

They still had to follow the same rules and regulations that were already in place for those fields…

Because of this act, Travelers Insurance was able to merge with Citibank, forming the new entity: Citigroup…… As of right now, we aren’t bailing them out… Why? Because they are not the problem…

THIS is the problem….

The Commodity Futures Modernization Act of 2000.

This act repealed the accord which banned single stock futures. The legislation also provided certainty that any products offered by banking institutions would not be regulated if they were sold as futures contracts.

This bill, which was never debated in the House, and was never debated in the Senate, created what became known as the Enron loophole, The “loophole” was drafted by Enron Lobbyists working with senator Phil Gramm, who until recently, was John McCain’s chief economic adviser.

An attempt to repeal the policy was vetoed by President Bush in 2008. Several Democratic Legislators introduced legislation to close the loophole from 2000-2006, but were unsuccessful due to Republican control of the House and Senate.

The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities, necessitated the government bailout of insurer A.I.G.

But then, late one December night, while America’s attention was fixed on the Supreme Court decision affecting the outcome of the 2000 election, a 262 page rider (Commodity Futures Modernization Act (“CFMA”)) was surreptitiously slipped into an 11,000 page Omnibus bill just as Congress was to leave on Christmas break, written in language that only a corporate lawyer could decipher, by one Senator Phil Gramm. (R-Tx). Not only did this rider wipe out all Federal oversight of this very speculative market, but it subsequently wiped out each and every state and local ordinance that up to that point, had regulated this commodity.

Those who try to blame Clinton and his tenure for today’s crises, now can be lumped on the same level of credibility as those criminals who are videotaped and shown on national television doing their crime, and when brought before a judge, say it was their mother……

The Republican Party owns this financial crises… The first step is to hold them accountable in the election coming up on November 4th… They started it, they sneaked it through Congress, they covered it up, and received billions of dollars in amounts of bonus money for doing so…

You and I will pay their bill…

Go ahead, vote Republican if you want to… but in doing so you’re just trying to put out our nation’s financial fires with gasoline, not water…..

Advertisements