Monday Musings: May 3, 2010
Sunday, May 2, 2010 at 21:51 “Ironically, that reversal of the New Deal regulations that had operated successfully for 60 years, the Glass-Steagall Act, was referenced by Blankfein in his Tuesday testimony explaining how Goldman and other firms spun out of control.
When asked by Sen. Ted Kaufman, D-Del., how Goldman had morphed from a traditional investment bank backing sound business ventures to a market gambler in fanciful products, Blankfein attributed it, somewhat forlornly, to “a change in the sociology of the business that took place over the last 15 to 20 years.” He added, “I’m not sure that it was precipitated by the fall of Glass-Steagall or it caused Glass-Steagall to fall. …”
Of course there was nothing inevitable about the fall of Glass-Steagall in 1999, since it was the result of decades of lobbying by the financial industry. That change was followed by the total deregulation of financial derivatives by the Commodity Futures Modernization Act, which Rubin had pushed and which President Clinton signed into law.” Robert Scheer column, ‘What a Piece of Crap’
Yes, there was nothing ‘inevitable’ about the fall of Glass-Steagall - beyond what you would expect from nearly 20 years of brainwashing that said any and all government regulation is bad, bad, bad … for business.
Starting with the GOM (Grand Old Man) of the GOP, Ronald Reagan and his witless jokes about government, leading through the Clinton years and ending with Bush, all the hard fought and hard won regulatory gains meant to protect ‘We the People’ were shredded and tossed. The country has been thoroughly sold on the idea that government is necessarily bad, unions are unnecessary and that the only thing that needs to be BIG is the military-industrial complex.
You’re looking at the wreckage of this ‘thinking’ in the Wall Street mess, the toxic oil sludge that is about to flow inexorably across the sensitive wetlands and valuable fishing grounds of Louisiana - thanks to BP and a Tea Party chant of ‘Drill, Baby, Drill’- and miners dying in one lousy, unsafe mine after another.
So far as I can see, very few business below the dizzying heights of Goldman Sachs, are doing very well sans the government regulatory environment of old.
