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Tuesday, December 15, 2009

Rewriting history: They're at it again!

All over the blogosphere, commenters suffer from unvented spleens. The PUMA contingent has been proven utterly right about Obama, and now all the (former?) Obots don't know how to react. Those arrogant bot bastards would rather bite off their own nipples than say "I got it wrong and I'm sorry."

(Incidentally, I am not a PUMA, being too ornery to accept any categorization not of my own devising. I am, and have been since early 2008, an anti-Obama Democrat. Keep it at that, and make no further presumptions.)

Naturally, the demoralized bots have resorted to the one activity that gives them solace: Blaming Bill Clinton for everything that has ever gone wrong in the world, up to and including the film version of The Spirit.

That's why the blogosphere brims with snarling references to Bill Clinton's alleged gutting of Glass-Steagall, the banking reform act put through in the days of Hoover and FDR. Glass-Steagal kept banks out of the insurance and stock brokerage game; if the law had remained on the books, wheeler-dealers could not have turned mortgages into a worldwide Ponzi scheme. The bots want you to believe that Barack Obama has been forced to clean up a mess made by Bill Clinton.

The "Blame Bill!" contingent never mentions that Obama has always ruled out renewing the Glass-Steagall provisions:
The argument is not to go back to the regulatory framework of the 1930's because, as I said, the financial markets have changed substantially. The question is, how do we build new regulatory systems that are flexible, that reflect new realities, that aren't going to put undue constraints on innovation in the financial markets...
He said those words in 2008. Since that time, Obama has done little or nothing to regulate the financial markets, aside from offering a grandly odious scheme to institutionalize government backing of the "too-big-to-fail" financial institutions. What Obama wants goes beyond moral hazard: It's moral suicide.

In fact, the basic idea behind Glass-Steagall remains valid, and it was valid in 2008. Things have not changed that much since 1933. A kiss is still a kiss, a sigh is still a sigh, and Wall Street is still filled with hyenas. That is why some in Congress are, thank God, talking about bringing us back to sanity on the Glass-Steagall front.

And as we scan that front, where is Barack Obama? Nowhere in sight. Steny Hoyer, not the White House, is fighting for the return of Glass-Steagall.

Oh, but it gets better: Former Citibank Chairman John S. Reed -- the businessman who instigated the 1999 repeal effort -- now wants Glass-Steagall back. But not Barack Obama. Wrap your brain cells around that flabbergaster, kitties: Obama stands to the right of the guy who ran Citibank.

Let's return our attentions to the "Blame Bill" contingent.

What was Clinton's real role in the repeal of Glass-Steagall back in 1999? I shall repeat some material published previously. These are facts which most "progressives" don't want you to know, because most progressives suffer from an incurable case of Clinton Derangement Syndrome. To paraphrase a popular Upton Sinclairism, it is difficult to get a person to understand something if his CDS depends on his not understanding it.

As mentioned above, Glass-Steagall divided commercial banks from investment houses; it also created the FDIC (which, I am happy to report, is still there). Banks grew to dislike this "separation of powers." Why? Because in boom times, people put their money in stocks, while in hard times, people put cash into savings accounts. Banks wanted to get in on both rackets.

In 1998, Travelers (a really big insurance and financial services company) announced a merger with Citibank (a really big bank headed by the aforementioned Mr. Reed). This was not legal. This merger violated Glass-Steagall. That's why a lot of helpful people in Congress decided to change the law. You may decide for yourself whether campaign contributions affected that decision.

Thus was born the Gramm-Leach-Bliley Act, which replaced Glass-Steagall. A growing number of economists believe that this Act helped to create the current subprime crisis, because it allowed bad loans to be packaged and sold in a global game of three-card monte.

Here's the key fact that the the progs won't tell you about: The Gramm-Leach-Bliley Act passed by a veto-proof majority in a Republican-controlled Congress.

You can blame the Republicans, but not just the Republicans. There were also powerful Democrats, such as Dodd and Schumer, who wanted to kill Glass-Steagal.

The Gramm-Leach-Bliley Act passed the House by a whopping 343-86.

Did Clinton try to fight the act? Yes. Every step of the way. Contemporary reports prove the point, however much the progs may attempt to rewrite history.

The opposition was simply too powerful. Clinton had no choice but to focus like the proverbial laser beam on a more restrictive goal: Maintaining the Community Reinvestment Act, which Gramm hoped to kill with the same piece of legislation. The CRA, as expanded by Clinton in 1994, helped minorities and the working poor get home loans and business loans.

The Republican majority (and quite a few Democratic sell-outs) forced Clinton to compromise. Clinton signed the Gramm-Leach-Bliley Act, and even said a few laudatory words as he did so. That was the price of maintaining CRA. Blaming Bill Clinton for Gramm's stupid law is like blaming Raoul Wallenberg for not defeating the Wehrmacht single-handed.

The CRA is a major reason why most black people used to love Bill Clinton.

That love affair lasted until the Obama cultists began crying "racist!" at any perceived enemy, especially if that enemy was named Clinton. The resultant frenzy made a lot of people forget all about those loans.

Shall I come out and say it? Yes, I think I shall: Any black homeowner or small business owner who got loans thanks to Clinton's CRA, yet who later fell for the "Clintons-as-racists" canard, is an ungrateful asshole who deserves to be spat on.

Fortunately, many African Americans are finally starting to notice that Barack Obama has never helped any black person not named Obama.

Here's the irony: The Republican version of the "blame Bill" strategy is really a "blame the blacks" strategy. Ever since the disaster of 2008, conservatives have argued that the CRA caused the economic meltdown. All such arguments are pure bullshit.

Nothing in the Community Reinvestment Act forced fly-by-night mortgage outfits to hand out houses to anyone with a pulse. Nothing in the CRA permitted lying on loan application forms. Nothing in the CRA allowed for tossing out basic underwriting principles. Most importantly: Nothing in the CRA forced large financial institutions to slap a triple-A rating on weird new financial instruments based on crap loans, which were then sold worldwide. (And nothing in the CRA stops the Obama Justice Department from prosecuting the miscreants who lied about the value of those instruments.)

Bill Clinton did the right thing, given the tenor of the times. Nevertheless, everyone blames him.

The right blames Bill for preserving the CRA.

The left blames Bill for signing Gramm-Leach-Bliley -- which would have passed under any circumstances -- while never crediting him for preserving CRA.

Now you know what really happened. Any strained argument which attempts to rewrite this history is nothing more than CDS-fueled casuistry.

Oh. By the way. Do you recall the name of the 1999 bill? It was called the Gramm-Leach-Bliley Act. The "Leach" bit refers to Congressman Jim Leach. He's a Republican. And in 2008, he strongly supported Barack Obama.
Bill Clinton gave us the longest sustained economic expansion in our nation's history. Most of that economic prosperity went to people people at the bottom end of the scale, as the lower class shrank and the middle class grew faster than the ranks of the super-rich.
"You can blame the Republicans, but not just the Republicans. There were also powerful Democrats, such as Dodd and Schumer, who wanted to kill Glass-Steagal."

Okay Joseph another great thought provoking post as usual but I've got to ask - did Dodd & Schumer ever talk about WHY they wanted to kill Glass-Steagal?

Pardon my naivete here but I actually thought that Dodd & Schumer were some of the few GOOD Dems we had left.

It is just so weird that so many people who were Obots in '08 have become SO disappointed in Obama now.

Have you read Tom Hayden has recently stopped drinking the O Kool-Aid?:

Or have you read about Michael Moore's recent souring over the LightBringer?:

NOTE: Please be sure to read the Comments section for both posts too.
I still keep this one....of your blasts from the past.
I miss Bill.

Thank you Joseph.

The last couple of days have been mind boggling indeed.

This post helps a lot in setting my mind at ease, as I, as a German immigrant from 1968, have perceived the whole Clinton drama, created by the same forces that are now called the tea-baggers.

It's so good to be reminded of reality. You do us all a lot of good.
If those failed financial institutions were located in Arkansas instead of New York they would have pulled Ken Starr out of moth balls to investigate and indict these guys.
Don't forget about Rubin's role.
I have never understood CDS. Why do they dislike even hate the man so much? It makes absolutely no sense to me at all.

They hate the woman too.
Hey, anyone wants Glass-Steagall put back in place, Let's Do IT!

Mathew Carey literally saved the U.S.A. with his "The Olive Branch." Granting the importance of other men, and other actions at other times, this assertion is true. We would do well to study it now.

"...citizens, honest and honourable in private life, have been so deluded by the madness of party to believe, that the defeat, the disgrace and the disasters of our armies--the destruction of the public credit..."

[This was written in 1814, folks] "I am not ignorant, that my fears of civil war are regarded as ... the wild effusions of a disordered brain. I find myself in a small minority. ..."

For God's sake, at least read the Frontispiece. It was the best selling book for decades in its time. The result was that Democrats and Federalists (the parties of the time) used it to work together to save our republic from surrender to the British. The British collaborators in the U.S. were not destroyed, but they were driven underground...

Liberty of person, liberty of property, liberty of opinions were, in Carey's lifetime, nowhere greater than the U.S.A. They are not to be taken for granted, as we have been led to do through our being made people ignorant of history.
Thanks for another informative post, Joe.

I guess I'm like you--neither O-hole nor PUMA--for the simple reason that both the Obama supporters and the PUMAs are party traitors.

In my book, once you have trotted out right-wing smears against a fellow Democrat, you're a party traitor.

This designation applies perfectly both to the O-holes and the PUMAs. I want all of these people out of my party. (Of course, most of the PUMAs have already left. I would simply ask them to stay out.)

This makes the Democratic Party awfully small--but at least it won't be full of people who lie through their teeth about Democrats.

Face it, we just have some seriously low-caliber Democrats these days.

I blame the young. They can't write songs. They can't pick Presidential candidates. They mar their flesh with grotesque body piercings and tattoos. They don't vet their candidates. They think "South Park" is brilliant. Makes you almost wish we were drafting their little butts.

It is creepy to watch progressives construct their narrative of recent history, which seems to be that Obama got off to a great start and then "caved to the corporations," just like Clinton. Of course they completely ignore Clinton's excellent record on the economy.

Who knew progressives were just a bunch of callow pr*cks?

Even bright people like Matt Taibi ask why Obama has abandoned his progressive principles, in the apparent belief Obama was ever a progressive, or even a Democrat.

What can we do with people as confused as this? They called their fellow Democrats racists. They voted for a neocon with a speech defect who fought dirty against a woman. They are going to vote again if we can't talk them out of it.
Imagine what a Clinton (any one)could have done with a majority like what they are having now. That what makes their CDS more profound. what Clinton did in face of all the republicans hatred and obstruction and inspite of it made this administration even more pathetic. Either there are no real Left in this country or the real ones can't find their voices or balls
OMG. Look who's saying other people can't write songs. Don't give up the day job, Perry. You sing/songwrite about as well as you....pontificate.
Actually the Obama episode should illustrate just how potent the media propaganda machine truly is. I initially believed Obama was a ringer for those interests who want to wreck the country, i.e., Wall Street. These interests have now contaminated both political parties. Furthermore, the GOP THREW the election of last year knowing how bad things would get economically, hoping the Democrats would screw it up with this inexperienced guy in the White House and then come back with a vengeance. If this happens, we will be screwed forever as a country.
The left blames Bill for signing Glass-Steagall

No, this is missing a word or two. Should correct this to its opposite: 'signing the Glass-Steagall REPEAL,' or however you prefer styling it.

While this slight suggested edit is clearly what you meant, this topic is more complicated than I thought, and more complicated than you say.

To begin with, the FIRST Senate passage had exactly ONE Democrat voting yes, 44 voting no. That is not a veto-proof majority (66 or 67); it is not even a filibuster-proof majority (60). (I am perplexed to find the millionaire-club that is the Senate, even on the Democrat side of the aisle, voting so strongly against this (1 for, 44 against), while the House Democrats, the more populist, less-wealth-driven group, quite in favor. Maybe the CRA fix was already in the House bill, but it doesn't appear so from my reading so far. There was a late fix in conference, after passage in both Houses of Congress).

This was so much not a veto-proof bill prior to the conference report that Clinton directly threatened a veto over the CRA effects, had they been in the final bill.

To further muddy the water, Clinton himself in an interview with Maria Bartiromo published in BusinessWeek 9/24/08 denies his hand was forced, denies any connection of the repeal to the crisis, and says that in fact it helped ameliorate the situation, so he does not second-guess his decision, and still considers it a good decision, not having seen any evidence to that date to the contrary.

So this is all fairly confusing, Moebius-strip style, wherein one take melds seemlessly into its opposite when you follow it around.

IF we believe Joe's take on Clinton's role, and the need to bring back Glass-Steagall-style separations of commercial and investment banking, which is designed as a defense of Clinton's (allegedly, non-) role, then what are we to make out of Clinton's remarks in '08? We would have to say he is NOW (well, as of recently, anyway, pending evidence of any more current remarks) LYING HIS ASS OFF, presumably to cover a) Robert Rubin's key role, b) corporatist Democrats, and c) his historical legacy. Which would tend to support the Obama-cult take on him, which Joe is trying to contest.

OR, (and this makes my head hurt, because I have always been of the same opinion on the repeal as Joe) Clinton is speaking knowledgeably, and in good faith, and is RIGHT that the repeal was not harmful, and in fact, helpful, and the problem is really that the Obama-supported narrative on the repeal (which I repeat I have always bought into before) is false.

There are a surprising number of good talking points and evidence to point to support this last position (to my chagrin).

Great post Joeseph!

Perry Logan said...

"In my book, once you have trotted out right-wing smears against a fellow [communist], you're a party traitor.

This designation applies perfectly, I want all of these people out of [potential dictators pronoun here] party...[and] stay out.

This makes the Democratic Party awfully small"

great post Perry Logan, Sounds like party of one...but what the heck! I just added a few words here and there help make your point of view pop off the page!
>>the GOP THREW the election of last year

Absolutely, and it wasn't just because they knew how bad the economy was. It's also because they knew they could blame Obama for ALL of Bush's failures. Which they are now doing, very successfully.

Also, I think it's worth a mention here that Obama's chief fundraiser was Penny Pritzker, of the multi-billionaire Hyatt Hotels Pritzkers.
Penny ran, and ruined, her own little subprime loan bank.,CST-NWS-pritz28.article

Carolyn Kay
"Okay Joseph another great thought provoking post as usual but I've got to ask - did Dodd & Schumer ever talk about WHY they wanted to kill Glass-Steagal?"

The following links may prove enlightening:

Follow the *money*.
Sorry, Joseph, but Clinton could have vetoed the bill, even if it was going to be overriden. He did no such thing, so this vile law was put in with his approval. Vetoing it would have been a courageous move; but he was being a typical chickenshit here.

There is even less justification for his "welfare reform" actions.
Susan, you're getting really weird -- commenting on a post that is years old.

So you're saying that Clinton should have vetoed the bill, knowing full well that his veto would be overridden, and thus allowed that portion of the bill abolishing the CRA to sail through? That it was so important to maintain purity, even in the face of impossible odds, that he should have allowed a return to the bad old days of redlining?

Easy for you to say. You're not black.

Clinton was in a bad situation. He made the best deal he could. The repeal was going to go through no matter what he did. At least he managed to save the CRA.
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