Week 1, February 2010
In my continuing effort to keep you informed it’s my goal today to frame some of my support for the financial reform bill H.R. 4173 that passed the House in December— and is currently stalled in the Senate— which is intended to reinstate the bulk of the provisions from the 1930s-era Glass-Steagall Act that prohibited federally-insured banking entities from engaging in securities trading. More than a year into the Obama administration now, since financial regulation has not been passed, we continue to face the same perils in the financial industry that have been present since President Clinton repealed Glass-Steagall in 1999. This excerpt regarding the Glass-Steagall separation in banking from the article link below sums it up well:
“This setup worked splendidly for more than six decades, until the rules were changed to permit the merger of the two types of banking activity, which never would have happened had President Ronald Reagan renamed Volcker as head of the Fed back in 1987. To reappoint Volcker would have been the logical move given his spectacular record in taming inflation, which he brought down to 3.6 percent after it had risen to 11.3 percent thanks to the energy crisis of 1979. Reagan went with Alan Greenspan instead because of their shared ideological fervor for unfettered free markets. But the repeal of Glass-Steagall required bipartisan support, and that eventually came with the presidency of Bill Clinton, who reappointed Greenspan and his fellow free-market ideologues Robert Rubin and Lawrence Summers to head the Treasury Department. They joined forces with the Wall Street lobby, and as a result Glass-Steagall was repealed in 1999 when Clinton signed the law eliminating it.” Link to article…
Please note that in October of 2008, when questioned by the Oversight Committee of the House of Representatives, Former Federal Reserve Chairman Alan Greenspan candidly admitted that his approach to deregulating markets was fundamentally flawed. Please see this transcript of the exchange with the committee chairman Rep. Henry Waxman:
REP. HENRY WAXMAN: Dr. Greenspan, you had an ideology, you had a belief, that free, competitive—and this is your statement: “I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We’ve tried regulation. None meaningfully worked.” That was your quote.
You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?
ALAN GREENSPAN: Well, remember that what an ideology is is a conceptual framework with the way people deal with reality. Everyone has one. You have to. To exist, you need an ideology. The question is whether it is accurate or not. And what I’m saying to you is, yes, I’ve found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.
But if I may, may I just finish an answer to the question previously posed?
REP. HENRY WAXMAN: You found a flaw in the reality—
ALAN GREENSPAN: Flaw in the model that I perceived as the critical functioning structure that defines how the world works, so to speak.
REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right. It was not working.
ALAN GREENSPAN: That it had a—precisely. No, that’s precisely the reason I was shocked, because I’ve been going for forty years or more with very considerable evidence that it was working exceptionally well.
As I stated at the top, it’s my intention to keep you informed. As we stand at press time, our financial system continues to operate with the same lack of regulation that led to where we have arrived today where consumer banking and securities trading are comingled, where a derivatives market worth HUNDREDS OF TRILLIONS OF DOLLARS is completely unregulated, and where we all are held hostage by a system that enables massive lobbying of Washington politicians to persistently effect stalls on meaningful legislation to address these well-known financial market flaws. It affects us all, and it’s very important that we all become informed and involved in the process of changing it. Thanks for reading and thanks for being informed and involved.
See here for more about the arguments in favor of financial reform.
To contact me about financing your dream-home click here.
Weekend Wanderer’s Events
…finding the treasures in your town and beyond.
Two for This Weekend:
Independent Film Fest at the Roxie in SF: “Rasta prophets, slacker romantics, Iranian rockers, shakespearian vampires, escaped princesses, dysfunctional crime families, superman’s secrets, and Hitchcock remixes to your liking? All these and many more will be playing February 4-18 at the world-famous Roxie Theater on 16th between Valencia and Guerrero.” Just over a block from the 16th St BART station.
Alexander/Alexandria: The Flowering of Hellenistic Culture: ”Humanities West presents Alexander/Alexandria: The Flowering of Hellenistic Culture, a 2-day program of lectures, discussions, and presentations of art & poetry exploring the interplay of Greek learning, literature, & art with Egyptian, Persian, & Hebrew cultures that emerged in Alexandria following the death of Alexander the Great.”
Help Your Fellow Living Beings:
Cooking for a Cause – Room to Read Fundraiser with Parties That Cook:”Join Parties That Cook® and Crushpad Winery for an evening of delicious food and wine at Cooking For a Cause, an evening benefitting Room to Read. Room to Read is an international education non-profit organization dedicated to bringing the life-long gift of education to millions of children across the developing world.”
Two Weekends from Now:
G. Love and Special Sauce at the Fillmore: If you can imagine the genres of jazz, country, rock n’ roll, and hip-hop all mixed together, there you will find G. Love and Special Sauce. Here is a video link of one of their most recent popular songs. This is next Thursday night at the historic Fillmore in San Francisco. Looks like a great show for a fun time!
Pic of the Week… from my phone camera:
“Rock, Wire, Sunset” in Loma Rica