The Three Un-Wise Men

I tried to post this on Hot Air, but some would not post.  Here's the true story:

On 14-15 December, 1992 in Little Rock, President-elect Bill Clinton held the Clinton-Gore Economic Conference.  Among the topics discussed with men like Alan Greenspan, Robert Rubin, and Larry Summers was the repeal of Glass-Steagall.  (My ex was there).

While repealing Glass-Steagall may have been a mistake (the Obama WH said to bring it back would be to abandon the Ipod and bring back the Walkman), the biggest, singular failure of Clinton was to heed the warnings of his CFTC head, Brooksley Born, allowed the derivatives market to grow to 1.4 quadrillion dollars and largely unregulated. Ms Born begged Mr Clinton. Messrs. Rubin, Greenspan and Summers disregarded the warnings and convinced Mr Clinton to ignore her because they wanted to help their buddies on Wall Street.

You really need to watch PBS' "The Warning". The interview with Ms Born will help you understand that which you merely throw darts at...blindfolded:

http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

"If any three people are most responsible for the failure of financial regulation, they are Greenspan, Larry Summers, and my former colleague, Bob Rubin. In 1999 they advised Congress to repeal the Glass-Steagall Act, which since 1933 had separated commercial from investment banking. By 1999, Wall Street was salivating over such a repeal because it wanted to create financial supermarkets that could use commercial deposits to place bets in the financial casino. That would yield the Street trillions."
- Robert Reich, Progressive Pygmy

"Greenspan, Summers and Rubin all acted -- or failed to act -- to enable Wall Street's quest for higher profits via the opaque OTC market structure model and did so at the expense of the public interest. Instead of a truly free and transparent securitisation market where occasionally a player does fail, today's OTC jungle ensures the destruction of a significant portion of capital deployed by dealers and investors both"?

- New York Times, 28 April 2009

"On derivatives, yeah I think they were wrong and I think I was wrong to take [their advice] because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don’t need any extra protection, and any extra transparency. The money they’re putting up guarantees them transparency."

- William Jefferson Clinton, 2010

The demise of Glass-Steagall and the failure to properly regulate derivatives are the fault of both parties.

W signed Sarbox into law in 2002.  It was the first regulation of Wall Street in years.