A FINANCIAL HISTORY LESSON

April 2, 2009 – 2:59 pm

What did some of the current players say when the US Congress in 1999 rescinded the Depression-era Glass-Steagall Act which led directly to the current financial crisis? Here’s a timely reminder from journalist Dave Lindorff.

George Santayana once famously said, “Those who cannot learn from history are doomed to repeat it.” But what about those who don’t just ignore history, but who hire and take counsel from those who committed historic follies in the past?

Back in November 1999, Congress passed legislation pushed by then Sen. Phil Gramm (R-TX), rescinding the Depression-era Glass-Steagall Act. The measure, backed by the Clinton administration, and overwhelmingly passed by the Senate (90-8) and the House (362-57), opened the way for banks to merge with investment banks and insurance companies, and led directly to the current financial cataclysm.

A report on that Congressional action written by reporter Stephen Labaton and published in the New York Times on Nov. 5, 1999 under the headline “Congress Passes Wide-Ranging Bill Easing Bank Laws,” includes some remarkable quotes from key players in that sellout to the financial sector.

Here’s Larry Summers, a chief architect of the current financial industry multi-trillion-dollar bailout giveaway being orchestrated by the Obama administration, where he serves as director of President Obama’s National Economic Council:

”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. This historic legislation will better enable American companies to compete in the new economy.”

And then Sen. Bob Kerry (D-NB and now embattled president of the New School in New York City), with a line that should probably be etched someday on his tombstone as his most memorable line:

“The concerns that we will have a meltdown like 1929 are dramatically overblown.”

Visit Dave’s website for the complete article: http://www.thiscantbehappening.net

Note: Dave Lindorff  is a Philadelphia-based journalist and columnist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now available in paperback). He can be reached at [email protected]

  1. 3 Responses to “A FINANCIAL HISTORY LESSON”

  2. Again…always the liberals getting us in one mess after another.God help us.

    By matt_the_cat on Apr 5, 2009

  3. really, matt? “liberals”? both republicans and democrats are responsible for this, neither having IMO anything other than intellectual timidity when it comes to regulating the so-called free market.

    By mb on Apr 6, 2009

  4. can’t argue too much w you there (McCain was not my/best choice).However alot can be said for forcing banks to make low interest loans,mortgages for those who can’t and as it turned out could never make the payments.Thankx barney frank,chris dodd

    By matt_the_cat on Apr 28, 2009

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