Wall Street’s Mercenaries Ride Donkeys
by David Swanson
September 13, 2010
Robert Scheer’s new book “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street,” is not yet another account of how we got robbed or “why the economy imploded for dummies.” If you’re like me, you just didn’t need another lesson in how swapped collateralized debt obligation derivative tranches didn’t really make the pie higher. Scheer’s book is something else: a straightforward broad-view account of the past thirty years focused on who did the robbing.
Here’s the short answer that Scheer provides: Reagan announced the robbery but couldn’t pull it off. Clinton robbed us blind. Bush Jr. and Obama drove the get-away car, with Obama disguised as a security guard.
I’m simplifying to make the point that Scheer’s account, like most accounts of U.S. politics, is slanted toward presidentialism. When Scheer gets into the details, a picture that brings Congress into focus makes more sense of the history. Reagan didn’t repeal the Glass-Steagall Act of 1933, which Scheer points out saved Wall Street from itself for several decades, because presidents don’t legislate, Congress does. Or at least it used to. Congress refused to go along with Reagan but was glad to go along with Clinton. The partnership of President Clinton and the Republican Congress took us to the Bush-Obama era in which there really isn’t much need to note Congress’s existence anymore.
Scheer writes that Robert Reich told him in 2009 that “Clinton made a deal with [Alan] Greenspan in the first year of his administration that if the Fed kept interest rates low, the president would reciprocate with financial market deregulation.” Clinton had a Republican Congress to work with, and Senator Phil Gramm leading the push for the Gramm-Leach-Bliley Act of 1999, but he also had Robert Rubin, Lawrence Summers, Alan Greenspan, Timothy Geithner, and the whole gang that would resurface in the Obama White House with greater power, more developed greed and arrogance, and not the slightest shame over having created the mess they would pretend to remedy.
Joining the Clinton-Gramm effort to enact the deregulation and merger-friendly policies mainstreamed by Reagan were a civil rights leader and a corporation itself built on pure corruption: Jesse Jackson and Enron. Pushing back unsuccessfully were a consumer advocate and a community organization: Ralph Nader and ACORN. Scheer quotes from ACORN statements that we put out when I worked there that show that the very low-income people the corporate media would blame for Wall Street’s collapse had opposed the mergers and deregulation that caused it. Scheer also gives good credit to Brooksley Born, chair of the Commodity Futures Trading Commission, who gave the right warnings but was not heeded. Scheer makes sure, in contrast, that Fannie Mae and Freddie Mac, and those who ran them, come in for their full share of blame.