Wednesday, September 24, 2008

Dems Trying To Have It Both Ways

I decided to write this not to point the finger of blame at any particular person or party, but rather to prevent the current financial crisis from being used as a club in the upcoming presidential election.

With the failures of Fannie Mae and Freddie Mac, and the gyrations now under way to fix the problem, Barack Obama is out on the stump trying to blame the Bush administration and congressional Republicans for the mess. His running mate, Joe Biden, is cheering him on and saying that deregulation at the hands of Phil Graham is the root cause of the collapse. Phill Graham did sponsor S.900, which effectively repealed the Glass-Steagall Act of 1933, true. Democrats at the time, however, showered praise on the accomplishment. Now they want to blame Republican deregulation.

It's bad enough that Obama, Biden, Schumer and others are more concerned with winning back the White House than they are about rescuing the economy, but it's worse that they seem to think none of us have memories. When the Senate passed S.900, also known as Gramm-Leach-Bliley and was a bold deregulatory move, here's what Chuck Schumer had to say then:

"I first want to thank Chairman Gramm and Senator Sarbanes, Chairman Leach, Representative LaFalce, and all of my colleagues who worked so long and hard on this legislation," Mr. Schumer began, "Mr. President, this is a historic moment. We've been working towards it for 18 years ... the future of America's dominance as the financial center of the world is at stake. This bill is vital for the future of our country."

What is he saying nine years later?
"Eight years of deregulatory zeal by the Bush administration, an attitude of 'the market can do no wrong,' have led us down a short path to economic recession."

Yet just five years ago, the President sought to impose more regulation on the institutions, something that never came to fruition.

President Clinton, at the time he signed Gramm-Leach-Bliley into law in November of 1999, had this to say:

"The [Gramm-Leach-Bliley] Act repeals provisions of the Glass-Steagall Act that, since the Great Depression, have restricted affiliations between banks and securities firms. It also amends the Bank Holding Company Act to remove restrictions on affiliations between banks and insurance companies. It grants banks significant new authority to conduct most newly authorized activities through financial subsidiaries."

Just in case he wants to jump into the fray at somepoint and explore a bit of revisionist history as well.

Whether the bailout will prove to be wise is debatable and a cause of spirited disagreement among conservatives, to be sure, but I will continue to write on this subject right up until November 4th. I simply will not allow the democrats to rewrite history unfettered.

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