Summers: Bad policies came from Bush era, not the Clinton era

[kpete]

Source: The Hill


Summers: Bad policies came from Bush era, not the Clinton era
By Ian Swanson - 04/25/10 11:36 AM ET

President Barack Obama’s chief economic adviser on Sunday offered a defense of Clinton administration policies deregulating Wall Street’s rules.

Larry Summers, who was Treasury secretary in the latter years of the Clinton administration, said policies enacted by George W. Bush’s administration had more to do with the financial crisis than Clinton’s policies.

“I don’t believe that the decisions made in the 1990s went to the issues that were important in this crisis, unlike a number of decisions that were made in the post-2000 period,” Summers said on CBS’s “Face the Nation.”

As an example, Summers mentioned the decision by the Securities and Exchange Commission to allow investment banks to increase the amount of debt they can take on in relation to their assets. The Securities and Exchange Commission is an independent body.

Read more: http://thehill.com/blogs/on-the-money/corporate-governance/94189-summers-bad-policies-came-from-bush-era-not-clinton-era

[bluestateguy]

1. The Clinton Administration should not be let off the hook

Signing the repeal of Glass-Steagall was their decision, even if it was Phil Gramm and Thomas Bliley's bill.

[Captain Hilts]

2. I agree. But a Republican Congress would not have had it any other way and the GWB admin

completely IGNORED all oversight. Neglect, actually.

I would like for the Clinton Admin to have expressed more concern about the 'reforms' that took place on his watch.

[Turbineguy]

7. I don't recall he signed the bill to repeal Glass-Steagal

I think he signed the bill to keep the government going. The Gramm-Bliley bit was a Trojan Horse included in that bill. But the Bush Wrecking Crew was instrumental. Without their help the economic collapse would have failed. As it was they timed it wrong. The collapse wasn't supposed to take place until 2009.

[sabrina 1]

32. Clinton DID sign the Gramm-Bliley Act into law. Not only that

but Democrats overwhelmingly supported it in Congress. Only 8 Senators, one of them a Republican, opposed the law. Sen. Dorgan was one of the Dems who opposed and who warned against the ramifications of deregulation at the time. But there was so much celebration going for the 'free market' that his voice was barely heard back then.

Summers was just as responsible, as he favored deregulation and went after Brooksley Born, the woman who warned against the deregulation of the financial industry, blocking hers and others' efforts to regulate the derivatives markets.

They, Clinton's economic team, joined forces with Greenspan to fight off any attempt to stop that bill from passing.

There is no way that Clinton, Summers, Geithner, Bernanke, Greenspan et al, all of whom made out like literal bandits personally, get off the hook for the collapse of this economy.

Airc, the only victory Clinton got for the people when he signed that bill, was to preserve the Community Reinvestment Act, long a target of the GOP along with ACORN who supported minorities and the working poor, using that law, to apply for mortgages without being discriminated against.

With Dems we get some crumbs, but on the bigger issues, we get about as much as we would from Republicans. They just don't leave any crumbs, which leaves us with a really crummy choice as far as who to vote for.

[Igel]

38. It's an important hair to split.

The problem is that it's only split in one direction when it actually shows a systemic problem: When you have a bill with 23 fairly unrelated provisions, you have to wonder.

In many cases, 22 would fail if they were unrelated, but they're welded together--often with a "must pass" measure--to make sure that there's enough support to get otherwise unpopular measures made into law. It's also a handy club to beat opponents of individual measures over the head will: Congressperson A says, "I'm voting against this bill because as a result the sesame seed grinding industry in Trivial-town, Maine, will be devasted"; then Congressperson B comes back, "Congressperson A is voting against this meritorious bill to provide emergency hospital care to the sick and injured because he's mean and nasty." It makes for wonderful spin and glorious talking points. Not much enlightenment, however.

People complain about the filibuster, but one change I'd like is that a simple 10% vote of those present would be enough to divide a measure unless the parliamentarian finds that they are closely related--not in terms of spending and funding, for example where we "save" nearly $200 billion in health care because we save money on student loan administration, but in terms of policy. There'd be debate and no tabling allowed. Yes, it would mean instead of 25 humongous bills that pass there's be 2500 smaller bills, with perhaps 250 passing. Good.

Clinton's intent doesn't matter any more than any other president's intent when signing a bill like this. He signed it. He could have vetoed it and said, "If the thing that needs to pass is so important, take out the part I won't sign and send me a cleaner, streamlined bill." And he should have called for a nationally televised press conference or speech to make clear how nasty this practice is and why it should be reformed.

[laylah]

42. Let's not forget

NAFTA...and I LOVE Clinton. He was the best DINO pres we have had in my lifetime. On the other hand, he helped the downgrade of this country, imvho.

[cowman]

3. Like I'm going

to believe a fucking thing Larry Summers says. Pres. Obama should fire his sorry ass. Sounds like he is just trying to exonerate himself from any blame at all.

[Jackpine Radical]

4. Got room for two in that opinion?

Move over. I'm climbing aboard.

[Enthusiast]

13. I'm with you guys on this.

Get rid of any with a trace of stench.

[Jackpine Radical]

40. Welcome aboard.

[UpInArms]

5. your bench is going to very crowded - I'm sitting with you, too

:sckrunch:

[ozymandius]

14. Hear! Hear!

Without Rubin and the protégé team of Summers and Geithner - the stage would not have been set for Bush and his wrecking crew.

However, in all honesty, without Reagan, the stage would not have been set for Rubin and his asshole students.

[swilton]

28. The entire system stinks - it is as systemic as it is incestuous

The Democrots are the water carriers in this mess.

[Demeter]

16. Open up the balcony, I'm bringing in the SMW crowd

Get rid of Larry the Cable Guy already

[bobthedrummer]

41. They are all for ownership, except for owning up to what these fuckers did-I'm with ya on this!

:fistbump:

[onehandle]

6. Of course. George W. Bush and his Republican Congress are to blame.

Clearly.

[Jefferson23]

8. I can't stand Summers, and he's full of shit too.

The regrets of Bill Clinton
The ex-president is now fessing up to some of his worst decisions as president. Is the current president listening?

http://www.salon.com/news/opinion/feature/2010/04/23/bill_clinton_s_contrition/index.html


Professor Pants-on-Fire

http://www.thenation.com/doc/20100510/greider2


Bill Black's eye-popping opening statement at House FinServ hearing on Lehman Bros. failure

http://www.youtube.com/watch?v=3-HTylLzXu8

[Metta]

9. There's magic thinking if ever there was. Happy karma, Larry.

Lying snake. You can't rewrite history, pal.

[MannyGoldstein]

10. Dear God! Even Clinton Admits He Fucked Up!

Good to see that an unrepentant economic mass-murderer who made many millions during a brief stint on Wall Street is in charge in this administration's economic programs. We can just sit back and watch all of the change, great stuff.

[Tiggeroshii]

11. I'm pretty sure Brooksley Born will say differently.

As would I.

[Enthusiast]

12. I agree that Bush policies contributed

to the problem but so did Clinton's. All the regs should be restored. There is simply no reasonable justification for the American tax payer to be put at risk.

[proudohioan]

15. Can I cast my ballot for Reagan? nt

[Demeter]

18. The Founding Father of Wrecking the Foundations? Sure!

His mark on this country is like nuclear fallout.

[proudohioan]

22. You know.......

the more time goes by, THE WORSE HE SEEMS TO GET!!!! I didn't think that anyone could continue to fuck things up from beyond the grave, but he proves me wrong each and every day!

T.

[tclambert]

36. I think you mean nukular.

[Greyhound]

17. Another coat of whitewash ought to cover up that disaster.

:grr:

[Oregone]

19. Mass bipartisan fraud against the American people

[IndianaGreen]

20. Summers is covering up his big fat sorry ass!

This is the same Larry Summers that came up with the economic shock therapy for the post-Soviet economy, with disastrous consequences for everyone except for a new class of oligarchs which rose out of the ashes of the USSR.

[SpiralHawk]

21. "Shock & awe, baby. Smirk." - xCommander AWOL (R)

[BumRushDaShow]

23. He neglected to mention passage of Gramm-Bliley-Leach

as a near 300-page rider on the appropriations bill and his predecessor's http://www.nytimes.com/1995/02/27/business/white-house-is-joining-in-efforts-to-loosen-the-limits-on-banking.html?sec=&spon=&pagewanted=all">calls for repealing Glass-Steagall.:

New York Times
Business

White House Is Joining in Efforts To Loosen the Limits on Banking
By KEITH BRADSHER,
Published: February 27, 1995

WASHINGTON, Feb. 26— The Clinton Administration plans to call this week for legislation that would allow commercial banks, securities firms and insurance companies to merge, forming giant financial services companies that would offer everything from checking accounts to mutual funds and life insurance, Federal officials say.

In a speech prepared for delivery in New York on Monday and in Congressional testimony scheduled for Wednesday, Treasury Secretary Robert E. Rubin will urge Congress to repeal the Depression-era Glass-Steagall Act, the officials said. For more than 60 years, the law has forced financial concerns to choose between owning commercial banks or owning securities companies like brokerage firms and investment banks, but not both.

Mr. Rubin also plans to call for broad changes in the Bank Holding Company Act of 1956, which has effectively barred most financial concerns from owning both commercial banks and insurance companies, said the Federal officials, who spoke on condition of anonymity. Mr. Rubin's speech will represent the first time that the Administration has taken a position on eliminating the legal and regulatory barriers among financial industries.

Regulatory changes in recent years have already allowed commercial banks, like Citibank, to begin selling stocks and mutual funds on a limited basis. But the Glass-Steagall Act still bars Citibank, for example, from merging with a brokerage firm like Merrill Lynch or an investment bank like Goldman, Sachs, which provides corporate investment advice and helps companies issue stock. The Bank Holding Company Act bars Citibank fom merging with a big insurance company like Prudential.

More on the time line is available from this http://www.netrootsmass.net/selise/financial-regulation-timeline/">great site that was posted in this thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4355358#4355370">http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4355358#4355370

[truedelphi]

24. Except for that little thing about the 1999 Congress and Prez abolishing

Glass Steagall. And the 1999 Banking Reform Bill - a bill so convoluted that even public interest law firms don't tangle with it, as no one can parse all the various subsets of regs and do's and don'ts.

And of course, NAFTA And Gatt sending our jobs overseas.

But other than that, I guess you can say it was all just so hunky dory.

[rpannier]

29. Let us not forget

The 'Unemployment Reform' Bills that were passed and signed

[rsmith6621]

25. SUMMERS IS PART OF THE CORRUPTION OF THE FINANCIAL ...

....Collapse of this country....anyone that advised Clinton and Bush needs to go.....

.....OBAMA needs to fire anyone who has friends on Wall Street...... YES GREED runs amuck in the OBAMA White House..

[Jefferson23]

26. Let's not forget the Telecommunications Act of 1996 too:

EXECUTIVE SUMMARY
This study tells the story of the Telecommunications Act of 1996 and its aftermath. In many ways,
the Telecom Act failed to serve the public and did not deliver on its promise of more competition,
more diversity, lower prices, more jobs and a booming economy.

Instead, the public got more media concentration, less diversity, and higher prices.
Over 10 years, the legislation was supposed to save consumers $550 billion, including $333 billion in
lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in lower cable bills.
But cable rates have surged by about 50 percent, and local phone rates went up more than 20 percent.
Industries supporting the new legislation predicted it would add 1.5 million jobs and boost the economy
by $2 trillion. By 2003, however, telecommunications’ companies’ market value had fallen by about
$2 trillion, and they had shed half a million jobs.

And study after study has documented that profit-driven media conglomerates are investing less in news
and information, and that local news in particular is failing to provide viewers with the information they
need to participate in their democracy.

Why did this happen? In some cases, industries agreed to the terms of the Act and then went to court
to block them. By leaving regulatory discretion to the Federal Communications Commission, the Act
gave the FCC the power to issue rules that often sabotaged the intent of Congress. Control of the House
passed from Democrats to Republicans, more sympathetic to corporate arguments for deregulation.
And while corporate special interests all had a seat at the table when this bill was being negotiated, the
public did not. Nor were average citizens even aware of this legislation’s great impact on how they
got their entertainment and information, and whether it would foster or discourage diversity of
viewpoints and a marketplace of ideas, crucial to democratic discourse.

Now, as Congress once again takes up major legislation to change telecommunications policy, and as it
revisits the Telecom Act, major industries have had nearly a decade to reinforce their relationships with
lawmakers and the Administration through political donations and lobbying:
• Since 1997, just eight of the country’s largest and most powerful media and telecommunications
companies, their corporate parents, and three of their trade groups, have spent more than $400 million
on political contributions and lobbying in Washington, according to a Common Cause analysis of
federal records.

in full: http://www.commoncause.org/atf/cf/%7B8A2D1D15-C65A-46D4-8CBB-2073440751B5%7D/FALLOUT_FROM_THE_TELECOMM_ACT_5-9-05.PDF

[DallasNE]

27. Too Bad Summers Didn't Name Cox By Name

Cox was an even worse disaster at SEC than Brown was at FEMA.

[merkins]

30. Suck on it Larry

How did we ever get this failed piece of shit back in the federal government to fuck it up all over again?

[hollowdweller]

31. I thought it was refreshing that he gave Clinton a pass and took a shot at Bush

I always hear the republicans laying it all off on Clinton so I was glad to see him taking up for a democrat and taking a shot at the GOP, laying it all at their feet.

The GOP would do the same. I never liked Summers that much till I saw him do that today.

I think a little partisanship by the admin would go a long way to erasing the gains in polling the GOP has been making.

The "we were part of the problem" may be more bipartisan and all but it doesn't win elections.

[Phoebe Loosinhouse]

33. The definition of self-serving commentary. nt

[sendero]

34. Just goes to show..

.. that it's not only Repugs engaging in revisionist history.

The facts are clear, Clinton is VERY CULPABLE for this mess and he has even admitted as much.

[unkachuck]

35. we've had....

....the most fraudulent and bankrupt financial, economic and political system/policies for decades and Larry is now re-writing history?

"I don’t believe that the decisions made in the 1990s went to the issues..."

....I don't believe, you.

[tclambert]

37. I am shocked, shocked to hear that Bush administration imlemented bad policies.

Here's the logic: Bush believed the government can't do anything right. Therefore, by implementing incompetent policies, he simply proved himself correct. Thus, it was the right thing to do.

No, wait, if that was the right thing to do, then it would disprove his core belief, thereby making it the wrong thing to do, which would mean . . . Error! Does not compute! Norman, correlate!

[Igel]

39. In other words. . .

Former and present cabinet member declares self and former employer denies responsibility for anything that isn't good, laying all the blame on those that he doesn't agree with.

Summers goes on to say, "Current leading economic indicators are a rock solid basis for saying that my--our--current policies are golden, and that only bright, sunny days lie in our future." When asked about leading economic indicators during his former tenure as secretary, he continued, "It's only since I've been reappointed that leading economic indicators are worth anything. Oddly, in the late 1990s and in 2000, leading economic indicators had a correlation of -0.99 with what would have happened."

When asked why he believed this to be the case, he lucidly explained. "As you can see, if you take this function in 16-space and and just look at variables m, q, and f, the curl of function T becomes massive, so that we should expect the gradient of independent variables m, q, p, z, and y, with respect to function P(a, n) to be positive with respect to the fourth derivative of Z(a, b, p) taken respect to q. Now, this simplifies matters, but the complete explanation will be available shortly in the paper that I've submitted for publication in the Journal of Irremediably Unverified Results for--Obama's out of office in 2016?--February, 2017. But obviously, even to the layperson, this substantiates that women are inferior--I'm sorry, it's iron-clad proof that I'm right."

[MisterP]

43. any rewritten history has to be agreeable to the ruling party, I guess

just as we now have fluff pieces on Obama's "successes" that McLumpy would NEVER have done (like given us a hideous RomneyCare, absolved BushCo, hired SachsFaces, and continued butchering Middle Easterners), the One Party is quite willing to use partisanship when it absolves one of its own halves (and keeps the meat in the voting booths): thus, the Dems can safely attack Arizona's Bircher-Nazi law and 'Pub blocking of bank reform, and get all excited about how those two things will give "us" votes in November--and then maintain the system that gives the immigrant farmworkers lower wages than when Cesar Chavez protested and the banks playing with derivatives, not-lending, and avoiding Glass-Steagall. They'll also continue aiding and abetting the GOP's rightward march, while covertly tagging along with ever-more-rightist candidates who YOU HAVE to vote for, or the Teabaggers ('10), Palinites ('12), American Jobbik ('14), American Race Party ('16) will win! When there's a problem, they'll say that the answer is more capitalism and "competition," or more Democrats in Congress.

[ozone_man]

44. Summers (far left) at the bill deregulating derivatives Clinton signed.

In November 1999, senior Clinton administration officials, including Treasury Secretary Lawrence H. Summers, joined by the Federal Reserve chairman, Alan Greenspan, and Arthur Levitt Jr., the head of the Securities and Exchange Commission, issued a report that instead recommended legislation exempting many kinds of derivatives from federal oversight.In November 1999, senior Clinton administration officials, including Treasury Secretary Lawrence H. Summers, joined by the Federal Reserve chairman, Alan Greenspan, and Arthur Levitt Jr., the head of the Securities and Exchange Commission, issued a report that instead recommended legislation exempting many kinds of derivatives from federal oversight.

http://www.nytimes.com/2008/11/17/business/economy/17gramm.html?pagewanted=all

Summers, Rubin, Greenspan, and Gramm. These are some of the major culprits. Unfortunately the culture of Wall Street sleeze is still an integral part of Obama's cabinet, with his appointment of Geithner, Summers, Bernanke.

Still hoping for change here.