This chart comes to us from TPM by way of BradBlog. Pretty powerful stuff, if you ask me.Circa 1980, I had many arguments with Reaganites who insisted that LBJ's Great Society programs had bankrupted the country. And what (I asked) about a little thing called Vietnam? Didn't that cost money too?
If the Iraq and Afghan wars had never occurred, our debt would be manageable -- even with the recession. Let us never forget that the financial disaster of 2008 can also be blamed on Dubya's libertarian or neo-liberal deregulatory policies.
On a related note: Economists Gretchen Morgenson and Josh Rosner are warning of an even greater Wall Street disaster in the near future.
"The risks are enormous" because there's even more concentration of assets among the biggest banks, which are "too big to analyze and manage," he says.I'm not sure what to make of this prediction; feedback would be welcome. Roshner and Morgenson tend to blame Fannie and Freddie for the near-collapse of Wall Street, even though they were not to blame. They were hardly innocent, but they were not the cause. Morgenson has been associated with Steven Forbes, who is getting more Tea Party-ish by the day.
If the financial system was a "house of cards" before the crisis, the situation is worse today because back then investors had "some sense the numbers being given in annual reports and quarterly filings were accurate," Rosner says. "Now we know the government seems to be [complicit] in allowing them to fudge those numbers."
(Don't be surprised to see Forbes jump into the race, perhaps after the earliest primaries.)
On a related note: Why is that so many liberals (wrongly) blame Bill Clinton for ending Glass-Steagall? The true author of repeal was Texas Republican Phil Gramm, who probably did more than any other individual in Congress to destroy the American economy. Yet Gramm seems to be getting history's get-out-of-jail free card.
On a linguistic note: I've been using the term "Libertarian" as a catch-all term for the extreme laissez-faire policies that have destroyed our economy. This term is hardly ideal. For one thing, there are sectarian squabbles between the Randroids, the Friedmanites, the Libertarian party and the (growing) libertarian wing of the Republican party.
I'm also bothered because "Libertarian" derives from "liberty." In fact, Libertarianism has an undeniable historical tendency toward enslavement. Was not the antebellum South a more-or-less libertarian society? Can we not say the same thing about modern slave states, such as Dubai?
To be frank, I'm never quite sure when the word "Libertarian" should be capitalized.
"Neo-liberal" is an even worse phrase, since the uneducated might confuse it with JFK-style liberalism.
We need a better label for our enemy. Something kind of icky. Something that will piss them off. Suggestions...?
9 comments:
Why blame Clinton?
Because he could have vetoed and he didn't.
There is a photo of a smiling Bill Clinton surrounded by many Republicans at the dissolution of the Glass / Steagall act signing.
I think for Bill it was a chance to feel like he belonged with the "boys" after the two years of witch hunting the Republican 12 put him through.
I don't blame George Bush because he was damned if he did, and damned if he didn't. If Bush had really tried to end "free money" for homes, he would have been accused of typical republican racist tactics.
Instead, Mr. Bush went the other way and bragged that his administration had allowed for more minorities to own their first home than any other previous president.
I suggest that you don't know what you are talking about. As Tom Cruise once told Matt Lauer, "You're glib, Joe!"
Too lazy to look it up but I've heard that Clinton accusation made by the Kosholes. The rebuttal is the Reagan Democrats in congress gave Gramm a veto proof majority. But then like the republicans before them, O-bots don't let facts get in the way of their truths.
Thanks for the tidbit on Clinton / Phil Graham.
re the house of cards, I never know when to believe the warnings...I never believed the housing crisis would occur.
We definitely need a mocking term for Libertarians... way too many geeks define themselves as Libertarian and try to say "not all Libertarians are (fill in the nutcasery term here)."
I used to call them "Republicans who smoke pot." or "Republicans who didn't want to admit they're Republican." Not catchy, but very effective to say in person.
Tiro, Alessandro, I'll repeat what I've said before-- and sorry for the cut and paste job, but there's stuff I gotta do today:
* * *
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.
"We need a better label for our enemy. Something kind of icky. Something that will piss them off. Suggestions...?"
I'm partial to "goat-fucking assholes."
I know Josh Rosner. I worked with him in the past. We both smoked - I have since quit, so we spent a lot of time on the fire escape in the firm we worked at.
I believe he is writing a book with Morgenson, who I hear is a little on the dim side. But hey, who knows.
Josh used to rant on to me back in 2002/3 about the absurdity of the Agencies and the ridiculous incentives built into the american system. But I know that he wouldnt blame the whole thing on the agencies. I think he would argue that the purpose of the agencies is silly in a modern era. But loan origination standards were not their fault. Loan origination and underwriting issues were the nuts and bolts of the crisis.
He would rant on, and I would tell him "I know, I know, but its how you Americans want to run things. Corrupt, stupid and going to collapse but there is no telling people cos the whole system has been bought by the banks."
He didnt disagree then. Worth noting that now his main client now is a very big hedge fund who made a lot of money shorting mortgages.
I think Josh was well rewarded for his advice.
Harry
Really?
You say: The Gramm-Leach-Bliley Act passed the House by a whopping 343-86.
But what about the Senate? Oh, 54-44. So, 12 votes to override. There is a pretty strong chance the the veto would have held.
And Clinton fought it every step of the way? You wouldn't think so reading this New York Times article from the day of the signing.
http://www.nytimes.com/1999/11/13/business/clinton-signs-legislation-overhauling-banking-laws.html
Or, hey, read President Clinton's signing statement:
http://www.presidency.ucsb.edu/ws/index.php?pid=56922#axzz1NisOWTtr
I don't personally have it in for Clinton. In retrospect, I thought he was a pretty good president. I DO think of this as one of his mistakes.
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