On Our Financial Crisis: The "It's All the Republicans' Fault" Myth
I’ve heard it one too many times now to keep my mouth shut: the line that the current financial mess is all the Republican Party’s fault:
With our government hemorraging money, our economy in shambles because of the greed and malfeance of elected officials and big business alike. The republican party of the 21st century has shown that they can not be trusted to govern for the good of the country and the people, unless of course you are rich and a major contributor.
The democrats are not much better, but face it, this mess started and was exacerbated under a republican controlled congress, then made infinitely worse by a republican administration.
The thing is, I have a memory that works some of the time, and I remember that this mess started during the administration of Bill Clinton.
Let’s check my memory a bit. On banking deregulation, 1999, the New York Times:
The Clinton Administration and top Republican lawmakers reached an agreement early Friday to overhaul the financial system, repealing Depression-era laws that have restricted the banking, securities and insurance industries from expanding into one another’s businesses.
The deal was announced about 2 A.M. after a compromise was reached over the measure’s effect on lending rules for the disadvantaged, the source of months of partisan bickering between the White House and Senator Phil Gramm, the Texas Republican who heads the banking committee.
It concludes decades of attempts to rewrite banking laws to catch up with a marketplace that has already experienced broad consolidations and the rise of financial conglomerates offering bank and brokerage accounts as well as insurance….
White House officials withheld final approval of the agreement until aides could see the measure’s language. But the officials indicated Friday night that, with broad support from Democrats in Congress, the measure was all but certain to be signed by President Clinton. As such, it will be one of the most significant pieces of legislation to be written by the White House and the 106th Congress, which began its term considering whether to remove Clinton and has had a bitter relationship ever since.
“When this potentially historic agreement is finalized,” Clinton said in a statement, “it will strengthen the economy and help consumers, communities and businesses across America.”
Treasury Secretary Lawrence H. Summers said in an interview, “At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system.” The measure, he added, “would provide significant benefits to the national economy.”…
The breakthrough in Friday’s legislation came in a backroom meeting at the Capitol soon after midnight, when a group of moderate Senate Democrats — led by Christopher Dodd of Connecticut and Charles E. Schumer of New York — forced a compromise between Gramm and the White House over the legislation’s effect on the Community Reinvestment Act, a 1977 anti-discrimination law intended to encourage lending to minorities and others historically denied access to credit.
Dodd, whose state is home to the nation’s largest insurance companies, and Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act.
Chris Dodd. Chuck Schumer. Lawrence Summers. Bill Clinton. Wait a minute. They’re not Republicans.
The Gramm-Leach-Bliley Act was agreed to by the Senate by a 90-8 margin (Harry Reid and Joe Biden voted for the legislation; John McCain didn’t show up to vote), and in the House by a 362-50 margin (Nancy Pelosi voted for it).
Who voted for the Commodity Futures Modernization Act, the bill that made the crazy derivatives market possible? In 2000, the House voted 377-4 (51 not voting) for it, with House Democrats (181-2) voting for it in roughly the same proportion as House Republicans (194-2). (Senators never directly voted for it, but included it as part of an omnibus spending bill that passed.)
And who was the president that pushed the federal government to get more poor people to buy homes? Bill Clinton — even though renting can make much more economic sense than owning.
As Election Day approaches, let’s resist the urge to take the Republican/Democrat divide and try to shove every other divide into its confines. It’s not all the Republicans’ fault. A very large number of Democrats are also to blame, and we should not be afraid to say so.