The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Clinton Says that Obama is Wrong About Economic Crisis

Posted by iusbvision on October 1, 2008

As we have written about HERE, HERE, HERE and HERE. We have explained the current financial crisis in detail, how it happened, who got paid and who is responsible.

We have also written about how Barack Obama has been saying that there is no regulation, that capitalist free wheeling with no oversight led to this problem. Those who have taken the time to read the material know that such claims are nonsense. Bill Clinton, who bears a lesser amount of responsibility for this mess than Congressional Democrats on the banking committees do, properly and accurately stated the facts in some interviews lately about banking and mortgage regulations he signed into law. As we have said, if the regulations, while flawed, were followed in the spirit of the law, this mess might not have ever happened.

As we have shown in the previous posts linked above, a money train in an influence peddling scandal made sure that the spirit of the law was not followed. Congress was warned, some people tried to fix it, but most Democrats just said no and most of the elite media is ignoring this story and public record.

Bill Clinton sets the record straight on the Gramm-Leach-Bliley Act. It was not the deregulation Obama is saying it is, and it had little to do with the mess we see ourselves in now:

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress’s 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that “deregulation” bill into law, and he knows better.

In, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.

“But I can’t blame [the Republicans]. This wasn’t something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.”

We agree that Mr. Clinton isn’t wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle — oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement. commented on this issue HERE

UPDATE: Investors Business Daily and Human Events Magazine came out with an analysis (albeit they are a bit more strident in their partisanship) that verifies much of what President Clinton has stated. These two articles, especially the one from Human Events, has much evidence demonstrated or linked too. They also are similar to the analysis we wrote on September 21 HERE.

Chuck Norton

One Response to “Clinton Says that Obama is Wrong About Economic Crisis”

  1. Hi,

    I’m just getting started with my new blog. Would you want to exchange links on our blog-rolls?

    BTW – I’m up to about 100 visitors per day.

    [Hi Jamie,

    I am one of those 100 hits as I stop by your site about once a week. You have good instincts. I have had about 3100 hits in the last 24 hours. I will be happy to ad you to my blogroll. If you combine your good instincts with the ability to find obscure public records you would generate even more hits. Reporters are lazy, bloggers are relentless researchers and that is the key to getting more attention.

    Under “Other Places of note” I put your link with the description “No Holds Barred Political Analysis by Jamie Holts”

    – Editor]

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