My sources for this piece are: the previously cited PBS Frontline documentaries The Warning, Breaking the Bank, and Inside the Meltdown; also, a syndicated article by David Sirota, TARP on Steroids.
When Brooksley Born, the woman who formerly headed the Commodity Futures Trading Commission (CFTC) under Clinton, proposed regulating the then obscure market of Over-the-Counter Derivatives, she essentially was shut down by Alan Greenspan, Arthur Levitt, Larry Summers, Tim Geithner, and others in a series of private meetings and Congressional Hearings. [See The Warning.] A decade or so later, the "toxic" OTC Derivatives played a major role in the recent financial meltdown. Ms. Born, who was ridiculed in the late '90s, was vindicated in 2008-2009. Alan Greenspan, the wizard who seemingly could do no economic wrong, finally had to admit that he was totally wrong in constantly pushing for zero regulation of the Wall Street bankers. Arthur Levitt, former head of the SEC, has admitted publicly that he was wrong about Brooksley Born...and has praised her profusely. He is no longer a power in DC.
What about Larry Summers and Tim Geithner, the financial/economic titans who castigated Born during the Clinton days while relentlessly pushing for zero constraints on the Wall Street Bandits during the Clinton and Bush years...what happened to them? As you may know, they have top economic/financial posts in the Obama Administration. Prior to that, along with Hank Paulson, they were the main architects of the now infamous bank bailouts---one of the greatest heists in modern history. Geithner is now the Treasury Secretary, and Summers is again a top economic advisor to the President of the United States. WOW! What punishment for being so wrong in the past. They are still in positions where they can funnel money to their former Wall Street cronies.
Funny I should mention that. Currently there's a legislative bill known as the Financial Stability Improvement Act. Basically, it's another TARP-in-the-making (Troubled Assets Relief Program), or as Representative Brad Sherman calls it, "TARP on steroids". The bill is being pushed hard by the Obama Administration, especially by Summers and Geithner. More bailouts for Fat-Cats are coming, while the average citizen continues to be gouged by banks because those banks are rushing to beat the regulations taking effect in February. Most people with credit cards (including me) have noticed that their interest rates have skyrocketed up for no good reason.
So it would appear that there is not much "change" from the Bush years regarding OTC Derivatives (still unregulated) and the bailing out of the big, elite bankers (who contribute about equally to Repub and Dem election campaigns). Why am I not surprised.
What does surprise me, though, is the amount of chicanery that we tolerate from national politicians. Here's a thought: in the next election, vote out ALL INCUMBENTS. If things don't improve after that, then in the following election, vote out ALL INCUMBENTS. Etc. How much do we have to take before we see the need for an entirely clean slate? Someone please tell me.
