You might enjoy this one, JackT:
http://www.associatedcontent.com/articl ... tml?cat=75
Failed Republican Policies to Blame for Financial Collapse, Energy Crisis
Laisser-Faire Policies Result in Severe Boom and Bust Cycles that Destroy Economies
By Robert Fanney
Today a financial institution that existed for over 158 years splintered into a million little pieces. At a time when major financial institutions from investment banks to mortgage lenders are under increased threat and when major American corporations like airlines and automakers are requiring increasing levels of government assistance, the failure of Lehman Brothers has rocked through the economy like a shot heard round the world. Only weeks after managing to cobble together more fake exuberance, Wall Street is again in the tank.
The elephant in the room
The elephant in the room is, well, an elephant. The Republican party entered rule after eight of the most prosperous years in US history. They inherited massive Clinton administration budget surpluses and an economy that was the envy of the world. They also inherited the world-class regulatory and taxation policies that were the underpinnings of a dynamic, healthy and vibrant economy. They wielded unprecedented control with both Congress and the White House under Republican control.
Eight years later, the economy is on the skids. Banks are failing. Corporations are requiring unprecedented levels of government assistance. The rich are getting richer, the poor and middle class are losing their shirts. Energy prices hit all time highs. Food costs spiraled. Infrastructure is neglected and key laws protecting our economy are gone.
Why? Well the banks failed as a result of irresponsible loopholes created in mortgage policy by none other than a Republican controlled Congress. An unjust bankruptcy code supported by the Republican party put even more strain on working families. A Republican party opposed to any form of alternative energy or efficiency gains enabled a vicious energy crisis to rip through markets, stealing capital and putting massive strain on airlines, automakers, shippers and anyone reliant on cheap energy. Perhaps it is also a strange coincidence, but a Republican party that denied global warming found itself having to manage multiple infrastructure-destroying hurricanes.
In the first seven and a half years of rule, this Republican party failed to respond to domestic troubles with any effectiveness whatsoever. This Republican party was dragged kicking and screaming to respond to Katrina and Rita. This Republican party ignored a growing financial crisis and claimed the basic economic fundamentals, fundamentals they unwittingly undermined, were sound. This Republican party that was so focused on eroding habeas corpus (the right to a fair trial) ignored a thousand pin-pricks and enabled the current economic tsunami rocking through the system.
But now that there's a presidential election it seems the Republican party has suddenly had a change of heart. That, for the few months surrounding the election cycle, they would do their best to act responsibly. Like a college student that shirks studying but suddenly crams in the last hours before the final exam, the Republican party has finally been faced with reality, responsibility, and the fact that it may well be found lacking.
So now that they will inevitably be held accountable, they are making motions that look like sound governance. They are making noises that sound like they actually care about the shrinking middle class. They are crying big fat crocodile tears even as they are cobbling together the policies that will do far more to ruin the middle class, our economy, and our way of life.
We need solutions not more problems
Republicans seem to think that wealth for the wealthy is a god-given right. They are happy to bail out institutions via corporate welfare sweetheart deals that preserve massive CEO bonuses and hold no-one accountable for failure. They claim that government shouldn't redistribute wealth and yet they raid taxpayer money to give hand-outs to the wealthy when they are in trouble.
Now it is certainly worthwhile to use taxpayer money to prop up institutions and protect the thousands of jobs they represent. But for god's sake, don't reward the failed leaders by protecting their already bloated fat-cat earnings. If America suffers then those responsible must also take a hit. And the American worker who has let his benefits evaporate, who is a working mom with kids, who was laid off from a well-paying job and now works two to make less, is most certainly NOT to blame.
The blame is a massive and endemic failure of out of touch, ideological leadership. It is an ideology that glorified greed. That implies that wealth makes right. And that, unjustly, claims that if you're not wealthy then you're not working hard enough. It is an ideology that thinks it right to dodge paying taxes and blames taxes themselves for economic trouble. It is an ideology that believes in privatization of critical infrastructure -- putting vital services in the hands of those who will irresponsibly squeeze it for as much short term profit as possible without any consideration for the medium or long term.
In short, it is the philosophy of looters.
And yet the Republican party presidential nominee proposes 'changes' that will only deepen the current crisis. He proposes more tax cuts for the wealthy and a pittance for working Americans. He, falsely, claims that the problem is government regulation when the actual problem is a failure of government to regulate. He claims that drill, drill, drilling will make us energy independent when it has continued to fail for the last 30+ years and kicks alternatives and efficiencies to the curb. He supports a reliance on an energy source that sends money overseas, destroys American infrastructure, results in scarcity and economic ruin, and imperils the climate. He says that the 'fundamentals of the economy are strong' when every evidence is that the economy is in its deepest trouble since the 1930s.
Remember the Keating Five and the Savings and Loans Crisis?
In the late 1980s, five members of Congress were charged with corruption and complicity with a savings and loans scandal. Over 747 savings and loans failed as a result of the crisis ultimately costing the taxpayer 160 billion dollars. The cause of the Savings and Loans crisis was deregulation that allowed banks to take more risks with taxpayer money. When the banks overextended themselves and collapsed, the whole economy suffered. The Keating Five were members of congress who, themselves, engaged in illegal and damaging banking practices in order to maximize personal profit. Guess who was a member of the Keating Five? Our illustrious minister of change -- John McCain.
Can we be confident that John McCain won't misuse our money in the same way George Bush did when he did it himself in the late 1980's? Can we trust a John McCain who profited from a financial disaster that set the stage for the economic recession of the early 90's? Can we believe in a Congressman charged with corruption and accused of "poor judgment" on key economic issues?
We've seen the deregulation movie before and we know it ends in economic collapse. But do John McCain and the Republicans know or even care? And is it wise to hire the same people to fix Washington that broke it in the first place?
McCain - Palin
by black francis » Tue Sep 16, 2008 11:46 am
http://query.nytimes.com/gst/fullpage.h ... nted=print
New York Times
September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.
The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.
The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.
At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.
Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.
After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.
''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.
Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.
Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
[b]''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said. [/b]
New York Times
September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.
The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.
The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.
At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.
Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.
After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.
''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.
Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.
Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
[b]''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said. [/b]
Last edited by black francis on Tue Sep 16, 2008 1:56 pm, edited 1 time in total.
With the Force as his ally he did battle with the Dark Lord. And he showed the measure of a true Jedi at a place called "The Death Star" where hope for the Galaxy was reborn. May all who struggle against tyranny hold his memory in their hearts
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by JackT » Tue Sep 16, 2008 1:54 pm
Wow those are kind of lengthy.
Frank's post appears to be an opinion piece (by a Science Fiction writer) filled with vigorous but arguable assertions, none of which seem to be backed up with any evidence. This does not seem to support Frank's claims-- it merely repeats them.
BF's appears to be a 2003 NYT news item about proposed oversight of Fannie Mae etc.
I like the Barney Frank quote:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
I was going to mention that S&L deregulation began under the Carter administration, and that 4 of the Keating 5 were Democrats, but Frank thinks playing the fact card is unfair. (BTW, John McCain was cleared of wrongdoing, and he did not financially gain in any way.)
Frank's post appears to be an opinion piece (by a Science Fiction writer) filled with vigorous but arguable assertions, none of which seem to be backed up with any evidence. This does not seem to support Frank's claims-- it merely repeats them.
BF's appears to be a 2003 NYT news item about proposed oversight of Fannie Mae etc.
I like the Barney Frank quote:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
I was going to mention that S&L deregulation began under the Carter administration, and that 4 of the Keating 5 were Democrats, but Frank thinks playing the fact card is unfair. (BTW, John McCain was cleared of wrongdoing, and he did not financially gain in any way.)
Last edited by JackT on Tue Sep 16, 2008 2:06 pm, edited 1 time in total.
"He was a mongoose, rather like a little cat in his fur and his tail, but quite like a weasel in his head and his habits."
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by black francis » Tue Sep 16, 2008 2:03 pm
Just read the bold and underlined text then decide if you want to delve further.
My point is basically there is blame enough for everybody and nothing is more annoying than fuckers trying to blame each other for shit they could have all done more to prevent.
Just like King Arthur will return to save Britain in her greatest time of need, I know Ross Perot is waiting to do the same for America.
My point is basically there is blame enough for everybody and nothing is more annoying than fuckers trying to blame each other for shit they could have all done more to prevent.
Just like King Arthur will return to save Britain in her greatest time of need, I know Ross Perot is waiting to do the same for America.
With the Force as his ally he did battle with the Dark Lord. And he showed the measure of a true Jedi at a place called "The Death Star" where hope for the Galaxy was reborn. May all who struggle against tyranny hold his memory in their hearts
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black francis - Bunnygod
- Posts: 10250
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by Frank The Bunny » Tue Sep 16, 2008 2:15 pm
I blame JackTJackT wrote:Yep, plenty of blame to go around.
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by black francis » Tue Sep 16, 2008 2:27 pm
JackT is guilty of a lot of stuff but I see nothing to suggest he sabotaged the American economy. I blame Red and Blinkilite because they spend all their income in the UK when America needs their dollars.
Last edited by black francis on Tue Sep 16, 2008 3:36 pm, edited 1 time in total.
With the Force as his ally he did battle with the Dark Lord. And he showed the measure of a true Jedi at a place called "The Death Star" where hope for the Galaxy was reborn. May all who struggle against tyranny hold his memory in their hearts
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black francis - Bunnygod
- Posts: 10250
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by Frank The Bunny » Tue Sep 16, 2008 3:07 pm
Interesting theory. I concur.black francis wrote:JackT is guilty of a lot of stuff but I nothing to suggest he sabotage the American economy. I blame Red and Blinkilite because they spend all their income in the UK when America needs their dollars.
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by withahip » Tue Sep 16, 2008 3:38 pm
I really believe this started in 1999.
Gramm-Leach-Bliley Act which was signed into law by Clinton.
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
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)
November 5, 1999
CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS
By STEPHEN LABATON
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.
The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.
''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.
Today's action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930's, the globalization of banking and the future of the nation's economy.
Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under existing law. Many foreign banks already enjoy the ability to enter the securities and insurance industries.
''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''
In the House debate, Mr. Leach said, ''This is a historic day. The landscape for delivery of financial services will now surely shift.''
But consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. They say that it fails to protect the privacy interests of consumers and community lending standards for the disadvantaged and that it will create more problems than it solves.
The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Supporters of the legislation rejected those arguments. They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks. The new law, they said, will also give regulators new tools to supervise shaky institutions.
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
Others said the legislation was essential for the future leadership of the American banking system.
''If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,'' said Senator Charles E. Schumer, Democrat of New York. ''There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.''
But other lawmakers criticized the provisions of the legislation aimed at discouraging community groups from pressing banks to make more loans to the disadvantaged. Representative Maxine Waters, Democrat of California, said during the House debate that the legislation was ''mean-spirited in the way it had tried to undermine the Community Reinvestment Act.'' And Representative Barney Frank, Democrat of Massachusetts, said it was ironic that while the legislation was deregulating financial services, it had begun a new system of onerous regulation on community advocates.
Many experts predict that, even though the legislation has been trailing market trends that have begun to see the cross-ownership of banks, securities firms and insurers, the new law is certain to lead to a wave of large financial mergers.
The White House has estimated the legislation could save consumers as much as $18 billion a year as new financial conglomerates gain economies of scale and cut costs.
Other experts have disputed those estimates as overly optimistic, and said that the bulk of any profits seen from the deregulation of financial services would be returned not to customers but to shareholders.
These are some of the key provisions of the legislation:
*Banks will be able to affiliate with insurance companies and securities concerns with far fewer restrictions than in the past.
*The legislation preserves the regulatory structure in Washington and gives the Federal Reserve and the Office of Comptroller of the Currency roles in regulating new financial conglomerates. The Securities and Exchange Commission will oversee securities operations at any bank, and the states will continue to regulate insurance.
*It will be more difficult for industrial companies to control a bank. The measure closes a loophole that had permitted a number of commercial enterprises to open savings associations known as unitary thrifts.
One Republican Senator, Richard C. Shelby of Alabama, voted against the legislation. He was joined by seven Democrats: Barbara Boxer of California, Richard H. Bryan of Nevada, Russell D. Feingold of Wisconsin, Tom Harkin of Iowa, Barbara A. Mikulski of Maryland, Mr. Dorgan and Mr. Wellstone.
In the House, 155 Democrats and 207 Republicans voted for the measure, while 51 Democrats, 5 Republicans and 1 independent opposed it. Fifteen members did not vote.
Tucked away in the legislation is a provision that some experts today warned could cost insurance policyholders as much as $50 billion. The provision would allow mutual insurance companies to move to other states to avoid payments they would otherwise owe policyholders as they reorganize their corporate structure. Many states, including New York and New Jersey, do not allow such relocations without the consent of the insurer's domicile state. But the legislation before Congress would pre-empt the states.
Both the Metropolitan Life Insurance Company and the Prudential Life Insurance Company are in the midst of reorganizing into stock-based corporations that are requiring them to pay billions of dollars to policyholders from years of accumulated surplus. In exchange, the policyholders give up their ownership in the mutual insurance company.
The legislation would permit any mutual insurance company to avoid making surplus payments to policyholders by simply moving to states with more permissive laws and setting up a hybrid corporate structure known as a mutual holding company.
The provision was inserted by Representative Bliley at the urging of a trade association. It attracted little opposition because it was attached to a provision that forbids insurers from discriminating against domestic-violence victims.
In a letter sent to Congress this week, Mr. Summers said that the provision ''could allow insurance companies to avoid state law protecting policyholders, enriching insiders at the expense of consumers.''
Gramm-Leach-Bliley Act which was signed into law by Clinton.
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
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)
November 5, 1999
CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS
By STEPHEN LABATON
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.
The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.
''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.
Today's action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930's, the globalization of banking and the future of the nation's economy.
Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under existing law. Many foreign banks already enjoy the ability to enter the securities and insurance industries.
''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''
In the House debate, Mr. Leach said, ''This is a historic day. The landscape for delivery of financial services will now surely shift.''
But consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. They say that it fails to protect the privacy interests of consumers and community lending standards for the disadvantaged and that it will create more problems than it solves.
The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Supporters of the legislation rejected those arguments. They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks. The new law, they said, will also give regulators new tools to supervise shaky institutions.
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
Others said the legislation was essential for the future leadership of the American banking system.
''If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,'' said Senator Charles E. Schumer, Democrat of New York. ''There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.''
But other lawmakers criticized the provisions of the legislation aimed at discouraging community groups from pressing banks to make more loans to the disadvantaged. Representative Maxine Waters, Democrat of California, said during the House debate that the legislation was ''mean-spirited in the way it had tried to undermine the Community Reinvestment Act.'' And Representative Barney Frank, Democrat of Massachusetts, said it was ironic that while the legislation was deregulating financial services, it had begun a new system of onerous regulation on community advocates.
Many experts predict that, even though the legislation has been trailing market trends that have begun to see the cross-ownership of banks, securities firms and insurers, the new law is certain to lead to a wave of large financial mergers.
The White House has estimated the legislation could save consumers as much as $18 billion a year as new financial conglomerates gain economies of scale and cut costs.
Other experts have disputed those estimates as overly optimistic, and said that the bulk of any profits seen from the deregulation of financial services would be returned not to customers but to shareholders.
These are some of the key provisions of the legislation:
*Banks will be able to affiliate with insurance companies and securities concerns with far fewer restrictions than in the past.
*The legislation preserves the regulatory structure in Washington and gives the Federal Reserve and the Office of Comptroller of the Currency roles in regulating new financial conglomerates. The Securities and Exchange Commission will oversee securities operations at any bank, and the states will continue to regulate insurance.
*It will be more difficult for industrial companies to control a bank. The measure closes a loophole that had permitted a number of commercial enterprises to open savings associations known as unitary thrifts.
One Republican Senator, Richard C. Shelby of Alabama, voted against the legislation. He was joined by seven Democrats: Barbara Boxer of California, Richard H. Bryan of Nevada, Russell D. Feingold of Wisconsin, Tom Harkin of Iowa, Barbara A. Mikulski of Maryland, Mr. Dorgan and Mr. Wellstone.
In the House, 155 Democrats and 207 Republicans voted for the measure, while 51 Democrats, 5 Republicans and 1 independent opposed it. Fifteen members did not vote.
Tucked away in the legislation is a provision that some experts today warned could cost insurance policyholders as much as $50 billion. The provision would allow mutual insurance companies to move to other states to avoid payments they would otherwise owe policyholders as they reorganize their corporate structure. Many states, including New York and New Jersey, do not allow such relocations without the consent of the insurer's domicile state. But the legislation before Congress would pre-empt the states.
Both the Metropolitan Life Insurance Company and the Prudential Life Insurance Company are in the midst of reorganizing into stock-based corporations that are requiring them to pay billions of dollars to policyholders from years of accumulated surplus. In exchange, the policyholders give up their ownership in the mutual insurance company.
The legislation would permit any mutual insurance company to avoid making surplus payments to policyholders by simply moving to states with more permissive laws and setting up a hybrid corporate structure known as a mutual holding company.
The provision was inserted by Representative Bliley at the urging of a trade association. It attracted little opposition because it was attached to a provision that forbids insurers from discriminating against domestic-violence victims.
In a letter sent to Congress this week, Mr. Summers said that the provision ''could allow insurance companies to avoid state law protecting policyholders, enriching insiders at the expense of consumers.''
-
withahip - Über Fan
- Posts: 7629
- Joined: Fri Oct 19, 2007 1:49 pm
by black francis » Tue Sep 16, 2008 4:23 pm
I hate myself for posting about this stuff. What happened to us?
With the Force as his ally he did battle with the Dark Lord. And he showed the measure of a true Jedi at a place called "The Death Star" where hope for the Galaxy was reborn. May all who struggle against tyranny hold his memory in their hearts
-
black francis - Bunnygod
- Posts: 10250
- Joined: Fri Oct 19, 2007 1:02 am
by black francis » Tue Sep 16, 2008 6:15 pm
I saw a Loch Ness Monster special on the History Channel last week which has got me believing again. Bigfoot and UFOs there's no doubt. Chupacabra I'm not so sure about.
With the Force as his ally he did battle with the Dark Lord. And he showed the measure of a true Jedi at a place called "The Death Star" where hope for the Galaxy was reborn. May all who struggle against tyranny hold his memory in their hearts
-
black francis - Bunnygod
- Posts: 10250
- Joined: Fri Oct 19, 2007 1:02 am
by Epsilon » Tue Sep 16, 2008 7:27 pm
I lived through the Glass-Steagall days at my former employer, where
banks couldn't distribute its own mutual funds/products. Once that
law was repealed, all bets were off, lines were blurred even more as
to what banks and brokerages could sell, off-balance sheet assets
and liabilities weren't somebody elses risk any more. Banks were now
on the hook for the underlying investments, which seemed as of late to
have become extremely exotic and too complex with counterparty
solvency in question. I'm all for progress if it will make things better in
the long run, but not sure getting that law repealed was worth seeing
viable companies evaporate, creating unrepairable damage. So sad.
banks couldn't distribute its own mutual funds/products. Once that
law was repealed, all bets were off, lines were blurred even more as
to what banks and brokerages could sell, off-balance sheet assets
and liabilities weren't somebody elses risk any more. Banks were now
on the hook for the underlying investments, which seemed as of late to
have become extremely exotic and too complex with counterparty
solvency in question. I'm all for progress if it will make things better in
the long run, but not sure getting that law repealed was worth seeing
viable companies evaporate, creating unrepairable damage. So sad.
You put your lips to her lips to stop the lie.
-
Epsilon - Member
- Posts: 311
- Joined: Fri Oct 19, 2007 11:37 am
by Frank The Bunny » Tue Sep 16, 2008 9:07 pm
Mr. Brian showed me this one a few years ago:
http://www.electoral-vote.com/
http://www.electoral-vote.com/
- Frank The Bunny
- Über Fan
- Posts: 3203
- Joined: Sun Oct 21, 2007 10:58 pm
by Frank The Bunny » Tue Sep 16, 2008 9:35 pm
Anybody catch this?
<embed FlashVars='videoId=184481' src='http://www.comedycentral.com/sitewide/video_player/view/default/swf.jhtml' quality='high' bgcolor='#cccccc' width='332' height='316' name='comedy_central_player' align='middle' allowScriptAccess='always' allownetworking='external' type='application/x-shockwave-flash' pluginspage='http://www.macromedia.com/go/getflashplayer'></embed>
<embed FlashVars='videoId=184481' src='http://www.comedycentral.com/sitewide/video_player/view/default/swf.jhtml' quality='high' bgcolor='#cccccc' width='332' height='316' name='comedy_central_player' align='middle' allowScriptAccess='always' allownetworking='external' type='application/x-shockwave-flash' pluginspage='http://www.macromedia.com/go/getflashplayer'></embed>
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