Never Forget This: Republican/Democratic Senators Were Co-Sponsors Of This Depression ....

[Better Believe It]

when they voted by overwhelming majorities to repeal the 1933 Glass-Steagall Act which was designed to prevent this kind of financial meltdown.

Blame The Subprime Meltdown On The
Repeal Of Glass-Steagall
The Consumerist
April 17, 2008

A lot of blame has sloshed around for the sub-prime meltdown, from greedy borrowers to greedy mortgage brokers to Alan Greenspan, but if you want the real culprit, it was the repeal of the Glass-Stegall Act. On November 12, 1999, the champagne must have been shooting from the walls at Citigroup, which had worked behind the scenes for over 30 years to get the act overturned. After recovering from their hangover, they and their banking buddies went on a sub-prime lending orgy. But what was Glass-Steagall and how did it use to protect us?

Glass-Steagall was passed under the Roosevelt administration in 1933 in direct response to the Wall Street shenanigans that ushered in the Great Depression where banks shoved their own depositors into buying the stocks the banks were dealing. The basic idea was to keep banks from speculating with the savings that American citizens were entrusting within their vaults.

Now, on the one side they could sell mortgages to homeowners, and then invent fancy investment structures which they sold on Wall Street. Because they were "covered" on both ends, banks felt free to sell increasingly dicey mortgages, just so long as another sucker was picking up the garbage. This sucker was picking it up because he had a plan to repackage it and sell it to another sucker, and so on. Eventually we end up with no-doc stated income interest-only option-ARM no money down mortgages being repackaged as "sound investments" being sold as "stable assets" for city pension plans to park their money in. (See "Subprime Meltdown As Told By Stick Figures").

We can only imagine the level of machination exerted over those 30 years, but we do know this. Robert Rubin was Secretary of Treasury, which had oversight over Glass-Steagall regulation. Days before he resigned, Glass-Steagall was repealed. Just over a year later, he became chairman of the Citi executive committee, with an annual compensation of $40 million, a position he still holds, despite Citigroup's $24 billion in subprime-related losses.

Please read the entire article at:

http://consumerist.com/381032/blame-the-subprime-meltdo ...

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Repeal of the Act

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This veto proof legislation, the Gramm-Leach-Bliley Act, was signed into law by President Bill Clinton on November 12, 1999.

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s.

The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the "finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors . They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics..." These industries succeeded in their two decades long effort to repeal the act.

http://en.wikipedia.org/wiki/Glass-Steagall_Act

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Here's how the Senators voted on the final bill that President Clinton signed into law.

U.S. Senate Roll Call Votes 106th Congress - 1st Session

as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate

Vote Summary

Question: On the Conference Report (S.900 Conference Report )
Vote Number: 354 Vote Date: November 4, 1999, 03:30 PM
Required For Majority: 1/2 Vote Result: Conference Report Agreed to
Measure Number: S. 900
Measure Title: An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.
Vote Counts: YEAs 90
NAYs 8
Present 1
Not Voting 1

Grouped By Vote Position

YEAs ---90
Abraham (R-MI)
Akaka (D-HI)
Allard (R-CO)
Ashcroft (R-MO)
Baucus (D-MT)
Bayh (D-IN)
Bennett (R-UT)
Biden (D-DE)
Bingaman (D-NM)
Bond (R-MO)
Breaux (D-LA)
Brownback (R-KS)
Bunning (R-KY)
Burns (R-MT)
Byrd (D-WV)
Campbell (R-CO)
Chafee, L. (R-RI)
Cleland (D-GA)
Cochran (R-MS)
Collins (R-ME)
Conrad (D-ND)
Coverdell (R-GA)
Craig (R-ID)
Crapo (R-ID)
Daschle (D-SD)
DeWine (R-OH)
Dodd (D-CT)
Domenici (R-NM)
Durbin (D-IL)
Edwards (D-NC)
Enzi (R-WY)
Feinstein (D-CA)
Frist (R-TN)
Gorton (R-WA)
Graham (D-FL)
Gramm (R-TX)
Grams (R-MN)
Grassley (R-IA)
Gregg (R-NH)
Hagel (R-NE)
Hatch (R-UT)
Helms (R-NC)
Hollings (D-SC)
Hutchinson (R-AR)
Hutchison (R-TX)
Inhofe (R-OK)
Inouye (D-HI)
Jeffords (R-VT)
Johnson (D-SD)
Kennedy (D-MA)
Kerrey (D-NE)
Kerry (D-MA)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI)
Lieberman (D-CT)
Lincoln (D-AR)
Lott (R-MS)
Lugar (R-IN)
Mack (R-FL)
McConnell (R-KY)
Moynihan (D-NY)
Murkowski (R-AK)
Murray (D-WA)
Nickles (R-OK)
Reed (D-RI)
Reid (D-NV)
Robb (D-VA)
Roberts (R-KS)
Rockefeller (D-WV)
Roth (R-DE)
Santorum (R-PA)
Sarbanes (D-MD)
Schumer (D-NY)
Sessions (R-AL)
Smith (R-NH)
Smith (R-OR)
Snowe (R-ME)
Specter (R-PA)
Stevens (R-AK)
Thomas (R-WY)
Thompson (R-TN)
Thurmond (R-SC)
Torricelli (D-NJ)
Voinovich (R-OH)
Warner (R-VA)
Wyden (D-OR)

NAYs ---8
Boxer (D-CA)
Bryan (D-NV)
Dorgan (D-ND)
Feingold (D-WI)
Harkin (D-IA)
Mikulski (D-MD)
Shelby (R-AL)
Wellstone (D-MN)
Present - 1
Fitzgerald (R-IL)

Not Voting - 1
McCain (R-AZ)

http://www.senate.gov/legislative/LIS/roll_call_lists/r...

---------------------------------------
Statements in support of bill that repealed the Glass-Steagall Act



FOR IMMEDIATE RELEASE: CONTACT: CHRISTI HARLAN
Friday, November 12, 1999 202-224-0894

GRAMM'S STATEMENT AT SIGNING CEREMONY
FOR GRAMM-LEACH-BLILEY ACT

Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement today in a ceremony at the Eisenhower Executive Office Building, where President Clinton signed the Gramm-Leach-Bliley Act into law:

"The world changes, and Congress and the laws have to change with it.

"Abraham Lincoln used to like to use the analogy that old and outmoded laws need to be changed because it made about as much sense to continue to impose them on people as it did to ask a man to wear the same clothes he did when he was a child.

"In the 1930s, at the trough of the Depression, when Glass-Steagall became law, it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets.

"We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom.

"I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."

-30-

-----------------------------------------

THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release November 12, 1999
REMARKS BY THE PRESIDENT
AT FINANCIAL MODERNIZATION BILL SIGNING

Presidential Hall

1:37 P.M. EST

THE PRESIDENT: Thank you and good afternoon. I thank you all for coming to the formal ratification of a truly historic event -- Senator Gramm and Senator Sarbanes have actually agreed on an important issue. (Laughter.) Stay right there, John. (Laughter.) I asked Phil on the way out how bad it's going to hurt him in Texas to be walking out the door with me. (Laughter.) We decided it was all right today.

Like all those before me, I want to express my gratitude to those principally responsible for the success of this legislation. I thank Secretary Summers and the entire team at Treasury, but especially Under Secretary Gensler, for their work, and Assistant Secretary Linda Robertson. I thank you, Chairman Greenspan, for your constant advocacy of the modernization of our financial system. I thank you, Chairman Levitt, for your continuing concern for investor protections. And I thank the other regulators who are here.

I thank Senator Gramm and Senator Sarbanes, Chairman Leach and Congressman LaFalce, and all the members of Congress who are here. Senator Dodd told me the Sisyphus story, too, over and over again, but I've rolled so many rocks up so many hills, I had a hard time fully appreciating the significance of it. (Laughter.)

I do want to thank all the members here and all those who aren't here. And I'd like to thank two New Yorkers who aren't here who have been mentioned -- former Secretary of the Treasury Bob Rubin, who worked very hard on this; and former Chairman, Senator Al D'Amato, who talked to me about this often. So this is a day we can celebrate as an American day.

To try to give some meaning to the comments that the previous speakers have made about how we're making a fundamental and historic change in the way we operate our financial institutions, I think it might be worth pointing out that this morning we got some new evidence on the role of new technologies in our economy, which showed that over the past four years, productivity has increased by a truly remarkable 2.6 percent -- that's about twice the rate of productivity growth the United States experienced in the 1970s and the 1980s. In the last quarter alone, productivity grew at 4.2 percent.

This is not just some aloof statistic that matters only to the Federal Reserve, the Treasury, and Wall Street economists. It is the key to rising paychecks and greater security and opportunity for ordinary Americans. And the combination of rising productivity, more open borders and trade, working to keep down inflation, the dramatic reduction of the deficit and the accumulation of the surplus, and the continued commitment to the investment in the American people, research and development, and new productivity-inducing technologies has given us the most sustained real wage growth in more than two decades, with the lowest inflation in more than three decades.

I can tell you that back in December of 1992, when we were sitting around the table at the Governor's Mansion, trying to decide what had to be in this economic program, the economists that I had there, who are normally thought to be -- you know, you say, well, they're Democrats, they'll be more optimistic -- none of them believed that we could grow the economy for this long with an unemployment rate this low and an inflation rate this low. And it's a real tribute to the American people.

So what you see here, I think, is the most important recent example of our efforts here in Washington to maximize the possibilities of the new information age global economy, while preserving our responsibilities to protect ordinary citizens and to build one nation here. And there will always be competing interests. You heard Senator Gramm characterize this bill as a victory for freedom and free markets. And Congressman LaFalce characterized this bill as a victory for consumer protection. And both of them are right. And I have always believed that one required the other.

It is true that the Glass-Steagall law is no longer appropriate to the economy in which we lived. It worked pretty well for the industrial economy, which was highly organized, much more centralized and much more nationalized than the one in which we operate today. But the world is very different.

Now we have to figure out, well, what are still the individual and family and business equities that are still involved that need some protections. And the long, and often tortured story of this law can be seen as a very stunning specific example of the general challenge that will face lawmakers of both parties, that will face liberals and conservatives, that will face all Americans as we try to make sure that the 21st century economy really works for our country and works for the people who live in it.

So I think you should all be exceedingly proud of yourselves, including being proud of your differences and how you tried to reconcile them. Over the past seven years, we've tried to modernize the economy; and today what we're doing is modernizing the financial services industry, tearing down these antiquated walls and granting banks significant new authority.

This will, first of all, save consumers billions of dollars a year through enhanced competition. It will also protect the rights of consumers. It will guarantee that our financial system will continue to meet the needs of underserved communities -- something that the Vice President and I tried to do through the empowerment zones, the enterprise communities, the community development financial institutions, but something which has been largely done through the private sector and honoring the Community Reinvestment Act.

The legislation I signed today establishes the principles that as we expand the powers of banks, we will expand the reach of that act. In order to take advantage of the new opportunities created by the law, we must first show a satisfactory record of meeting the needs of all the communities the financial institution serves.

I want to thank Senator Sarbanes and Congressman LaFalce for their leadership on the CRA issue. I want to applaud literally hundreds of dedicated community groups all around our country that work so hard to make sure the CRA brings more hope and capital to hard-pressed areas.

The bill I signed today also does, as Congressman Leach says, take significant steps to protect the privacy of our financial transactions. It will give consumers, for the very first time, the right to know if their financial institution intends to share their financial data, and the right to stop private information from being shared with outside institutions.

Like the new medical privacy protections I announced two weeks ago, these financial privacy protections have teeth. We granted regulators full enforcement authority and created new penalties to punish abusive practices. But as others have said here, I do not believe that the privacy protections go far enough. I am pleased the act actually instructs the Treasury to study privacy practices in the financial services industry, and to recommend further legislative steps. Today, I'm directing the National Economic Council to work with Treasury and OMB to complete that study and give us a legislative proposal which the Congress can consider next year.

Without restraining the economic potential of new business arrangements, I want to make sure every family has meaningful choices about how their personal information will be shared within corporate conglomerates. We can't allow new opportunities to erode old and fundamental rights.

Despite this concern, I want to say again, this legislation is truly historic. And it indicates what can happen when Republicans and Democrats work together in a spirit of genuine cooperation -- when we understand we may not be able to agree on everything, but we can reconcile our differences once we know what the larger issue is -- how to maximize the opportunities of the American people in a global information age, and still preserve our sense of community and protection for individual rights.

In that same spirit, I hope we will soon complete work on the budget. I hope we will complete work on the Work Incentives Improvement Act, to allow disabled people to go to work -- and I know Senator Gramm has been working with Senator Roth and Senator Jeffords and Senator Moynihan and Senator Kennedy on that.

There are a lot of things we can do once we recognize we're dealing with a big issue over which we ought to have some disagreements, but where we can come together in constructive and honorable compromise to keep pushing our country into the possibilities of the future.

This is a very good day for the United States. Again, I thank all of you for making sure that we have done right by the American people and that we have increased the chances of making the next century an American century. I hope we can continue to focus on the economy and the big questions we will have to deal with revolving around that. I hope we will continue to pay down our debt. I still believe in a global economy. We will maximize the opportunities created by this law if the government is reducing its debt and its claim on available capital. So I hope very much that that will be part of our strategy in the future.

But today we prove that we could deal with the large issue facing our country and every other advanced economy in the world. If we keep dealing with it in other contexts, the future of our children will be very bright, indeed.

Thank you very much. I'd like to ask all the members of Congress to come up here while we sign the bill. Thank you. (Applause.)

President Clinton Signs Repeal



And these 8 United State Senators understood what exactly the repeal meant and they could not be bought off by Wall Street. They are to be commended for their bold stand against the crooks on Wall Street.

NAYs ---8
Boxer (D-CA)
Bryan (D-NV)
Dorgan (D-ND)
Feingold (D-WI)
Harkin (D-IA)
Mikulski (D-MD)
Shelby (R-AL)
Wellstone (D-MN)
Present - 1
Fitzgerald (R-IL)

And what stand did the "maverick" John McCain take on this legislation? He didn't vote! Sure .... he's a real tough pro-regulation kinda guy.

[SammyWinstonJack]

1. I love Al Gore for "inventing" the internets!

:evilgrin:

[Better Believe It]

3. ???? Al Gore never claimed that.

I don't get the connection to the Senate vote.

[2speak]

2. Thank you for this.

[Hannah Bell]

4. They ratified a fait accompli. The banksters killed G-S, the same ones picking your pocket now.

1. Who's responsible for the demise of Glass-Steagall?

Contrary to prevailing opinion, neither Clinton nor Congress seem to be primarily responsible. According to this timeline, it was big banks who lobbied for loosening of restrictions - in particular, Citicorp, J.P. Morgan, Chase Manhattan (now JPMorgan Chase) and Bankers Trust (now merged with Deutsche Bank).

And it was the Fed, mostly under the tenure of Alan Greenspan, who loosened them, making the final 1999 Congressional vote more or less the acknowledgement of a fait accompli:

This timeline is instructive:

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4154624

[Better Believe It]

5. And If The Senate Had Voted Against Wall Street's Bill That Would Have Been Meaningless?

Well, I have to admit that's the best lame excuse I've read let in defense of the Senate's capitulation to Wall Street.

Congrats!

But, you'll have to come up with something a lot better than that!

[Hannah Bell]

8. Not meaningless. But the regulation was broken long before the vote.

The vote is a distraction from the main point. Goldman, Morgan, etc. were the folks who lobbied for & got the restrictions lifted. The very folks who ran up derivatives & now have your bailout money.

Can you say "scam"?

[Kurt_and_Hunter]

6. Not Voting - 1 McCain (R-AZ)

[spag68]

7. Blame game

The blame game is useless. This is the time for pragmatic government, and looking for individuals to blame is not the way to go. Every time I read one of these posts, it makes me think you ae pushing the old " they are both the same" crap. When the Dems. are in, it is up to us, you and me and all the other progressives out here to hold them to a higher standard then the rethugs. We expect nothing less of them. You don't know what pressures and circumstances they were under at that time, so unless you KNOW something I don't, try to think of constructive methods and policies for the future. Do you want to have a good life in a free country or not? Many of us know all the crap you have printed, we have lived through it too. If your point is that Democrats are as bad as Republicans, then what are you doing here? Unless I have missed something this site is to advance democratic, progressive causes.

[Better Believe It]

9. The Bottom Line is .... they voted for Wall Street and against Main Street

"You don't know what pressures and circumstances they were under at that time, so unless you KNOW something I don't ...."

I do know something you may not know. The Senators were under pressure from the Wall Street speculators and tycoons who are responsible for this crisis. And I'm not so sure they had to apply very much pressure on those Senators. Most were probably willing and even eager accomplices. I find it hard to believe you're that naive and don't understand that.

"I have missed something this site is to advance democratic, progressive causes."

Please tell everyone here what great democratic and progressive cause those 90 Republican and Democratic Senators advanced when they voted for that
"free market deregulation" bill? I find it interesting that you don't have a kind thing to say in defense of those 7 Democratic Senators WHO DID VOTE AGAINST that reactionary legislation. Now why is that? Perhaps you think the Democrats who voted against Wall Street and for Main Street were standing in the way of democracy and progress.

When Democrats vote in support of Republican inspired legislation they become Republican enablers. When they vote in favor of deregulating Wall Street and turn their backs on Main Street, they become part of the problem, and not the solution. And that's what happened in 1999.

Facts are facts, and those facts won't change no matter how much you try to pretty up and put lipstick on those Republicans and Democrats who voted against the interests of the people and in support of the tycoons who caused this economic crisis.

Now if any of those Republican and Democratic Senators who voted to help the Wall Street crooks wish to admit they made a "mistake" that would be the honorable thing to do, if they honestly regret their vote. Don't you agree?