1999 was the key year. Then-Sen. Phil Gramm led the fight for what the financial industry had wanted ever since the New Deal: repeal of the Glass-Steagal Act, regulating the banking industry. Gramm and two other Republican senators wrote the Gramm-Leach-Bliley Act ...
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
On first vote in the Senate it passed, but along largely partisan lines (GOP in favor, Dems opposed); in the House it passed by a wide majority. After Republican senators added language strengthening the Community Reinvestment Act, helping those in disadvantaged communities, and provisions protecting privacy, Democratic senators supported the bill, which then passed both houses almost unanimously. President Clinton signed the bill into law in November 1999.
Not surprisingly, Sen. McCain voted for the Gramm-Leach-Bliley Act. Remember, that act repealed the Glass-Steagal Act's barrier to banks owning stock brokerages and insurance companies -- such mergers in the '20s had produced the Great Depression of the '30s -- and also remember that the co-author of the Gramm-Leach-Bliley Act was then-Sen. Phil Gramm, who recently wrote Sen. McCain's economic plan and who has been the "odds on" favorite to be a President McCain's Treasury Secretary ... at least until Gramm called everyday Americans complaining about the current economic condition "whiners."
Likewise, in 2000, Gramm pushed for and McCain voted for (and yes, "centrist" Clinton signed into law) the Commodity Futures Modernization Act, which made legal the mortgage "swaps" we hear so much about today -- at the core of our financial meltdown and uncertainty -- which distanced the originator of loans from the ultimate holder of loans. Bad loans came to be held by financial institutions all around the world, representing those hundreds of trillions of dollars at risk now.
Given that Gramm pushed through -- and McCain voted for -- the laws that more than any others deregulated the financial industry and led to our current financial crisis, do we really want a President McCain and a Treasury Secretary Gramm? Could we even afford them?
http://thinkprogress.org/2008/09/16/krugman-on-gramm/
For as bad as it is -- and may not get better anytime soon, no matter what we do -- things can always be a whole lot worse.
My dad, who saw all this coming as the New Deal safeguards were being torn down, grew up dirt poor during the Depression. I don't think the average American today can even imagine what it would be like to live in a world where food and clothing, let alone shelter and medical care, were almost luxury items.
As we can see, by looking at the historical record, both Democrats and Republicans have been responsible for the deregulation in the '80s and '90s that produced the current crisis, similar to -- although much larger than -- the S&L crisis almost twenty years ago.
But look at what is happening now. The Bush Bail-Out plan -- favored by big financial institutions -- called for a blank check to be given to Bush's Treasury Secretary. But wasn't it lack of oversight that led to this whole disaster? The Bush Bail-Out plan did not provide any means for the taxpayers to be rewarded for taking on the risk of buying up all these "toxic" loans. Nor did the Bush Bail-Out plan provide help for "Main Street" -- everyday Americans losing their homes because they have been conned by banks etc. into getting in over their head -- the Bush plan provided help only for "Wall Street" (True, we must prop them and big business up -- their fall would threaten everyone's life savings and jobs -- but there are people losing their homes right now to also consider). And the Bush Bail-Out plan did not put any limits on executive compensation at the very firms the taxpayers will be propping up.
Although Democrats during the Clinton years -- representing the then-popular mood for deregulation, started under Reagan -- did not do the right thing, the Democrats today -- under the leadership of Sen. Christopher Dodd, chair of the Senate Banking Committee, and Rep. Barnie Frank, chair of the House Financial Services Committee -- are rewriting the Bail-Out plan to include all the provisions it omitted; and now wiser for the bad experience -- like Americans during the Depression -- the public at large seems to now recognize that there is indeed a role for government in regulating the excesses of the financial industry: According to the polls, most Americans are favoring the congressional plan over the Bush plan ...
http://www.gallup.com/poll/110746/Americans-Favor-Congressional-Action-Crisis.aspx
So now Democrats are acting like real Democrats -- in a tradition going back to the days of FDR -- and not like "Republican Lite" -- what too much of the 1990s "New Democrats" "centrist" approach was. And I give a lot of the credit to Barack Obama for inspiring Democrats -- and independents and open-minded Republicans -- to stand up straight! Obama's message from Day One has been about how we everyday people can overcome powerful interests by standing up and standing together. That is how Americans have always overcome adversity, both at home and abroad.
By the way, there have been some stories going around on Fox News, in spam, etc. about how much support Fannie Mae has had from Obama, the Congressional Black Caucus, and Democrats overall and how much campaign money they have received from Fannie Mae. Some of these nasty innuendos have been debunked ...
http://voices.washingtonpost.com/fact-checker/2008/09/obamas_fannie_mae_connection.html
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