Somebody (In Congress) Saw This Coming and that Somebody Is Trying To Do Something About It [View All]

[omega minimo]

http://www.msnbc.msn.com/id/26315908/#29886298
transcript: http://www.msnbc.msn.com/id/29894735/


MADDOW: For a country pretty much unanimously focused on a single subject, it‘s amazing that stuff we are forgetting, they were just not factoring into the equation about why we ended up with this chicken fried, petrified, run-and-hide economy. Apparently, we are supposed to think that nobody could have seen this coming.
(BEGIN VIDEO CLIP)
RICHARD CHENEY, FMR. U.S. VICE PRESIDENT: I think some of the best financial minds in the country didn‘t see it coming.
GEORGE W. BUSH, FMR. U.S. PRESIDENT: No, we didn‘t see it coming.
SEN. JOHN MCCAIN, ® ARIZONA: But I don‘t really know of hardly anybody who exceptionally had said, “Wait a minute, this thing is getting completely out of hand.”
(END VIDEO CLIP)
MADDOW: Who could have possibly seen this coming? Nobody could have seen it. It was totally unforeseeable force majeure.

Join me now on a trip through the time machine, going back to 1999. All right, 10 years ago. The year the Gramm-Leach-Bliley Act was born. This bill was introduced by three Republicans: Gramm, Leach, Bliley, duh. And it removed a Great Depression era regulation that had said that banks, and investments banks and insurance companies all had to be separate.

Gramm-Leach-Bliley cleared the way for big financial companies to be all of those things wrapped into one. Big companies with huge internal incentives to take risks, companies that were so complicated they couldn‘t really be regulated, and companies that were so big that the government felt that they could not be allowed to fail.

At the time, in 1999, when this was being debated, Democratic Senator Byron Dorgan from North Dakota saw it coming, like he should have a psychic show in Vegas-level saw it coming. On May 6th, 1999, on the Senate floor, Mr. Dorgan said, quote, “This bill will, in my judgment, raise the likelihood of future massive taxpayer bailouts.” $1 trillion is massive, right?

Well, to the “New York Times” on November 5th, 1999, Senator Dorgan said, quote “I think we will look back in 10 years‘ time and say, we should not have done this, but we did because we forgot the lesson of the past, and that which is true in the 1930s is also true in 2010.”
:think:
DORGAN: Well, I‘m not—I‘m not necessarily sure I saw this big a crisis. But I said at the time, the banks—I said, if you want to gamble go to Las Vegas. I mean, this was not about a crystal ball. It was just common sense at that time.

You know, in the 1930s, we saw banks merge with, you know, real estate and security risks and the whole thing collapsed, ‘20s and ‘30s, and—so, we put in place, I wasn‘t here, but they put in place laws like Glass-Steagall to prevent all of that. And then, 1999, we were told, that‘s so old fashioned. Let‘s strip that away and allow big financial holding companies, one stop financial shopping.

And I thought it was nuts. I mean, how on earth could we forget the lessons that were so important that we learned so well and with such pain about seven decades prior?
:applause:
DORGAN: Well, I sat across the table from him at the White House two days ago. You know, there is a culture. And the culture is that Wall Street knows best. You know, there were only eight of us in the United States Senate that voted no. This was a huge deal to repeal the protections that were put in place after the Great Depression, a huge deal. Eight of us voted no.
:applause:
DORGAN: Well, and the other thing, immediately after this legislation passed, it stripped away all those protections and allowed all the big banks to marry up and decide that they loved each other and want to get together and merge, immediately after that, George W. Bush came to town as a new president and he hired regulators who were willing to boast about being willfully blind. They didn‘t want to regulate...

And the result is, we saw, you know, all of these credit default swaps and CDOs, all these exotic financial instruments, these derivatives—you know, in 1996, I wrote the cover story for “Washington Monthly” magazine on the subject of derivatives and pointed out there were tens of trillions of dollars of derivatives out there. The title of my cover story for the “Washington Monthly” magazine was, “Very Risky Business.”
:applause:
DORGAN: I‘d be happy to. But let me tell you what else we need, we need a select committee in the United States Senate with subpoena power that gives us the narrative of what happens so that everybody understands what happened. We need a financial crimes prosecution task force down at the Justice Department right now, working on these issues, and we need to restore a portion of the Glass-Steagall Act to say to banks: You‘re over here and the riskier things are over here and we are not going to bring you together again—never again.

http://dorgan.senate.gov/
DORGAN LAUNCHES YOUTUBE SITE http://www.youtube.com/senatordorgan
Dorgan Presses for Action to Address the Financial Crisis http://dorgan.senate.gov/issues/economy/financialcrisis/index.cfm
Dorgan's Taxpayer Protection Act http://dorgan.senate.gov/issues/economy/taxpayer-protection-act/index.cfm
Stopping the Outsourcing of Jobs http://dorgan.senate.gov/issues/economy/financialcrisis/index.cfm
http://dorgan.senate.gov/issues/economy/outsourcedjobs/index.cfm


Edit for shouty: "AND I THOUGHT IT WAS NUTS. I MEAN, HOW ON EARTH COULD WE FORGET THE LESSONS THAT WERE SO IMPORTANT THAT WE LEARNED SO WELL AND WITH SUCH PAIN ABOUT SEVEN DECADES PRIOR?"

Yeah, what's up with THAT?