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Clinton, the man who helped FIRE sector to convert the country into casino

"Bill Clinton conveniently forgets the hundreds of millions of campaign contributions that he and Hillary so famously raised from Wall Street for the Democrats. They taught their party, always a bit chaotic but left dispirited after the Kennedy assassinations, that 'greed is good.,' and it certainly pays well. You can put up $1000 and obtain a return of $100,000 in a futures market of which you know nothing, and do nothing, if you know the right people."

Old News ;-)

[Apr 18, 2010] Slick Willy Rewrites the History of the Financial Crisis and Regulation, Blames His Advisors

The hypocrisy of the oligarchs knows no bounds.

Bill Clinton conveniently forgets the hundreds of millions of campaign contributions that he and Hillary so famously raised from Wall Street for the Democrats. They taught their party, always a bit chaotic but left dispirited after the Kennedy assassinations, that 'greed is good.,' and it certainly pays well. You can put up $1000 and obtain a return of $100,000 in a futures market of which you know nothing, and do nothing, if you know the right people.

The price of their perfidy was the overturning of Glass-Steagall and the planting of the seeds of the bubbles and financial crises that the US is still experiencing today.

There is no doubt that George W. Bush hatched the egg, and nurtured it into a ferocious buzzard of fraud and greed. But Bill Clinton laid the egg. And Obama continues to feed the beast, and maintains the very same advisors that Clinton blames in the Rubin proteges Larry Summers and Tim Geithner.

Americans embrace the "CEO defense." Hey, everyone makes mistakes. All you have to do is say, "Oops, I made a mistake" and all is forgiven, from Greenspan to Clinton.

When you make a big enough mistake, or a series of mistakes, and profit by it, and your actions have the stench of corruption, you should be sacked, disgraced, and shunned for a decent period of time.

The elite media is in a panic. I had the opportunity to watch "The Chris Matthews Show" and the comparisons of Tim McVeigh, Ruby Ridge, and Waco to the Tea Party Movement went way over the top, suggesting the possibility of imminent crisis. I can almost see the over-reaction and paranoia coming over the horizon.

There is a tremendous temptation for the old media, and even the bloggers, to go along to get along, to deal only with the 'safe subjects' and reforms, and to play the party line for the status quo. It provides the admittance to the powers, and the venues where they pose for the press. It brings connections and praise from those in power. All you have to do is say thing, or deal with this legitimate problem but in the way we suggest. And ignore these other things.

It does happen. It is not always obvious, but it is there. And if you say 'no' you are attacked or shunned. And being your own person, not taking 'sides' in distorting the facts in one direction or the other, puts one is in the 'grays' always caught between black and white. It sounds noble, but it is a lonely watch.

I am absolutely no follower or even admirer of Sarah Palin. I think she is a shameless opportunist playing to the crowd, saying whatever will deliver money and power. She is the Bill Clinton of the right, or even worse, a Huey Long. And the Tea Party crowd is badly in need of adult supervision. And Fox News is too often blatant propaganda, and pandering to and inflaming extremism for commercial gain. I often suspect that they are part of the Hegelian dialectic, the means of defusing legitimate reform into ineffective noise.

Bear in mind I was a conservative before 'conservatism' was cool, going back to the Goldwater movement and the traditional and principal conservatism embodied by Edmund Burke and James Burnham. These Fox conservatives for the most part are the worst of breed. But such is the quality of discourse and action in the States as it declines.

But having said all that, the grievances are legitimate, the Congress is corrupted by the current campaign contribution laws, the US financial system is rife with fraud, the economy is dysfunctional as a price discovery and capital allocation system, and the inequality of power and wealth is a significant obstacle to progress and domestic tranquility.

Obama is leaving a leadership vacuum by his indolent style of leading by indirection, trying to build a consensus to do the right thing, teaching the Congress to fish. I have great sympathy for the challenge he faces. The problem is that the Congress cannot even find the stream for hitting one another with their poles. There are serious and fundamental flaws in the political and economic structure in the US that become more acute and systemically threatening with each false recovery.

How all this resolves is difficult to see. A new financial crisis will almost certainly bring things to a head, but it remains to be seen how America will react to the realization that they have been badly used, and are expected to suffer, in some cases greatly, for it. But before America the jackals appear to be descending on Europe. And Europe, and especially the UK, may provide us with some insight into the future of the world's greatest but declining superpower.

Bloomberg
Clinton Says He Had Bad Advice on Derivatives
By Joshua Zumbrun

April 18 (Bloomberg) -- Former President Bill Clinton said he should have pushed for regulation of financial derivatives when he was president, rejecting the advice of top economic advisers Robert Rubin and Larry Summers.

The argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people would buy them,” Clinton said on ABC’s “This Week” program. “The flaw in this argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”

“Even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect 100 percent of the investments,” Clinton said. The show was taped yesterday for broadcast today.

Tighter regulation of derivatives trading is part of a package of financial reforms being pushed by the Obama administration against Republican opposition. The Senate is debating a bill introduced by Banking Committee Chairman Christopher Dodd that would also give the federal government the authority to unravel institutions whose failure threatens the financial system.

Bush Blamed

Clinton also said the Bush administration contributed to the financial crisis with lax regulation.

“I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go,” Clinton said. If Clinton’s head of the Securities and Exchange Commission, Arthur Levitt, had remained in that job, “an enormous percentage of what we’ve been through in the last eight years would not have happened,” Clinton said.

Levitt is a director of Bloomberg LP, parent of Bloomberg News.

Clinton also said that Republicans who controlled Congress would have stopped him from trying to regulate derivatives. “I wish I had been caught trying,” Clinton said. “I mean, that was a mistake I made.”

"Do you think he is so unskillful in his craft, as to ask you openly and plainly to join him in his warfare against the Truth?

No; he offers you baits to tempt you. He promises you civil liberty; he promises you equality; he promises you trade and wealth; he promises you a remission of taxes; he promises you reform. He promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind.

He scoffs at times gone by; he scoffs at every institution which reveres them. He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods.

Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

John Henry Newman, The Antichrist

[May 28, 2009] Blaming Clinton

May 28th, 2009 | The Big Picture

Clinton got sucked into the black hole of the prevailing economic ideology of the time.
Summers, Rubin, Greenspan, Gramm all of them.

Prodded of course by the titans at the time namely Sandy Weill.

Permabear:

As a Democrat and a big Clinton fan over the years, I cannot deny that Clinton made huge blunders signing the repeal of Glass Steagall and legisltation the following year, both penned by Phil Gramm by the way, that deregulated the derivatives market. At the time very few people raised eyebrows about either of these pieces of legislation. In fact I believe the derivatives legislation, Commodities Futures Modernization Act, was the last piece of legislation Clinton signed as President and was hidden in some larger legislation, and signed at at time that no one was really paying any attention to it.

Clinton overall was a pragmatist and he presided over a very prosperous economic period. Nevertheless he bought into the conservative, free market, deregulation is good, mantra of the time, which was shared by almost all Republicans, Alan Greenspan and a large portion of Democrats, including Summers, Rubin and Geithner.

Rather than blame Clinton for going along with the program, I personally blame the philosophy itself. I consider it to be part of the Reaganomics mindset which basically ruled the country from 1980 until the Great Recession of 2008. It is Reaganomics much more than Clinton the man who should be what history puts most of the blame on for the massive mess we see today. For the mess didn’t begin with the signing of these foolish pieces of legislation. The debt, derivatives, and deregulation (3Ds as I call it) all began with Ronald Reagan and ended with the hyperinflationary depression that we are only beginning to experience today. http://www.jonasclark.com/wordpress/wp-content/uploads/2008/12/usdebt_serendipitythumb.jpg

Calvin Jones and the 13th Apostle:

Permabear:

1. Well as some say, Clinton was the most successful Republican President since Eisenhower.

Steve Barry:

Permabear is 100% correct…debt started rising in 1980…clearly a new paradigm was in effect. It was already out of control by 1987, when Reagan made the colossal, unimaginably disastrous blunder of installing the maestro. Total credit proceeded to go on a drunken orgy, continuing to this day to heights we cannot recover from in our lifetimes. The pain of it unwinding has yet to be felt. What we have had so far is just credit growth slowing. The deflationary debt crash should start soon, with plant closings and massive defaults.

It was the maestro…so blind that he could not recognize the greatest credit bubble the world may ever know…that could have maybe stopped it from happening.

BelowTheCrowd:

I hate to get into “Godwin’s Law” territory, but I think when the history of this period is written by those who are looking back rather than by those of us who lived through it, it will be seen in much the same way as the rise of the Nazis in Germany, or the Salem Witch Trials, or the John Law’s Mississippi Company scheme in France, or any number of other highly destabilizing events, in which ultimately no one person can be blamed.

As was the case in every single one of those situations, blame will be apportioned to many parties acting on behalf of many different interests, but the overall conclusion will be that at a critical point in history, everybody went crazy all at once. Virtually all major interests simultaneously decided that it was OK to deny and throw away rules and traditions that had worked so well, despite the fact that any logical analysis showed this change to be irrational if not completely insane.

In this case, we have met the enemy and he is us, along with all those who have claimed to represent us at any point in the past 20-25 years.

[Jun 26, 2009] Did Clinton cause the banking crisis - MSN Money

A trio of regulatory changes and missteps on the former president's watch let the banks run wild and encouraged the housing bubble. But he had help, of course. By David Weidner, MarketWatch

On Wall Street and Main Street they call William Jefferson Clinton the "Comeback Kid," but it's not because of some Election Day surprise.

It's because almost everything he did regarding financial-services regulation has come back to haunt us.

If it wasn't apparent before, the former president's handiwork became clear when President Barack Obama announced his plans for sweeping financial-services reforms. Obama's efforts to bring fair dealing to the mortgage markets, rules to the derivatives marketplace and restraint to big financial companies underscore the missteps of Clinton's second term.

We had weakly regulated markets when Clinton took office, but by the time he left, they were an invitation to lawless dealing. For the ease of it, Willie Sutton would have traded his gun and mask for a briefcase and necktie.

Clinton created a fertile environment for home-lending charlatans and hiding places for Wall Street swindlers, and upset a regulatory structure that had served the financial marketplace so well for more than six decades.

 

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Clinton bashing -- like Bush bashing -- is often a cop-out, but Clinton made critical mistakes when it came to dealing with the financial industry. Three poor decisions stand out.

The first, in 1997, was a change to the amount of taxes a homeowner had to pay on the sale of his or her home, up to $500,000. That change effectively made buying and selling a home for profit the most compelling investment in America by tax standards. It shifted our housing market from one of supply and demand to one of rampant speculation.

The second mistake was one of inaction. In 1998, Long-Term Capital Management's use of derivatives and leverage required a massive $3.6 billion hedge fund bailout organized by the New York Federal Reserve Bank. After the fiasco rocked the markets, the administration was on the spot. Would it push for tighter regulation of this new form of investment vehicle? Would it rein in the derivatives markets?

Alan Greenspan and Arthur Levitt, then the chairmen of the Federal Reserve and the Securities and Exchange Commission, respectively, and Clinton's Treasury secretary, Robert Rubin, all counseled against it to varying degrees. No action was taken.

Repeal of Glass-Steagall

But perhaps the biggest mistake of the Clinton years regarding Wall Street and the one that rings loudest today was the 1999 repeal of the Glass-Steagall Act of 1933, which effectively had split investment banking and brokerages from commercial banks.

In the years leading up to the repeal, Wall Street had been grumbling that the law had become an anachronism. Financial technology was sophisticated. We were so much smarter than they were back in 1929 that there was no way a financial-services conglomerate could pose a threat to the system, Wall Street experts said. Besides, they argued, it was a good idea for banks to handle customers' investments and savings as a hedge in the bad times.

The Clinton administration effectively had its hand forced by the merger of Citicorp and Travelers Group in 1998. The creation of Citigroup (C, news, msgs) required a lot of chutzpah by its CEO, Sandy Weill, because it was effectively prohibited under Glass-Steagall.

Enter the Gramm-Leach-Bliley Act of 1999, which not only allowed Citigroup to exist but also eliminated key barriers between bankers, who were supposed to limit risks, and investment bankers, who were supposed to take them.

The biggest argument critics have against bringing back Glass-Steagall is that it would be too chaotic. Whole companies would have to be cleaved. Relationships would have to be unwound.

Well, back in 1933, the law effectively split J.P. Morgan, the bank, from what would become Morgan Stanley, the brokerage. Both seem to have come through the disruption fairly well.

Aides who abetted

Clinton didn't do it all alone. He had a lot of help from Congress. He was under pressure from a legislature controlled by laissez-faire Republicans who were hellbent on pushing Ronald Reagan's ideology of deregulation and free markets. The repeal of Glass-Steagall passed 90-8 in the Senate and 362-57 in the House.

Greenspan, the virtually universally loved Fed chairman, gave everyone bad advice in regard to interest rates, home ownership and derivatives. Under Levitt at the SEC, Wall Street accounting reached its nadir, only to reveal itself with the WorldCom and Enron scandals after he left office.

Then, Clinton's Republican successor closed the deal. President George W. Bush took the ball into the end zone, making buying a home easier than spelling "FNMA" or "FICO" and removing the last vestiges of capital requirements at U.S. brokerage firms.

Ultimately, however, the big bang -- the wall torn down between brokers and banks -- happened on Clinton's watch. It's largely the problem that's being tackled in the current administration's 85-page white paper on reform. After all, Citigroup's banking side probably would not have loaded its balance sheet with toxic loans had it not been under pressure from the arm making all of the stuff.

Citi also wouldn't be the size it is today, a monster the government deems "too big to fail" that has required more than $300 billion in cash and guarantees to stabilize.

Citigroup's drag on the nation probably isn't what Clinton envisioned, but that's the problem with modernizing markets and making our financial system cutting-edge: Too often we get cut.

The Mellowing of William Jefferson Clinton by PETER BAKER

May 31, 2009

When the subject came up during our conversation in Chappaqua, Clinton calmly dissected the case against him and acknowledged that in at least some particulars his critics have a point. In almost clinical form, as if back at Oxford as a Rhodes scholar, he broke down the case against him into three allegations: first, that he used the Community Reinvestment Act to force small banks into making loans to low-income depositors who were too risky. Second, that he signed the deregulatory Gramm-Leach-Bliley Act in 1999, repealing part of the Depression-era Glass-Steagall Act that prohibited commercial banks from engaging in the investment business. And third, that he failed to regulate the complex financial instruments known as derivatives.

The first complaint Clinton rejects as “just a totally off-the-wall crazy argument” made by the “right wing,” noting that community banks have not had major problems. The second he gives some credence to, although he blames Bush for, in his view, neutering the Securities and Exchange Commission. “Letting banks take investment positions I don’t think had much to do with this meltdown,” he said. “And the more diversified institutions in general were better able to handle what happened. And again, if I had known that the S.E.C. would have taken a rain check, would I have done it? Probably not. But I wouldn’t have done anything. In other words, I would have tried to reverse everything if I had known we were going to have eight years where we would not have an S.E.C. for most of the time.”

Clinton argued that the Gramm-Leach-Bliley Act set up a framework for overseeing the industry. “So I don’t think that’s such a good criticism,” he said. “I think, actually, if you want to make a criticism on that, it would be an indirect one — you could say that the signing of that legislation sped up what was happening anyway and maybe led some of these institutions to be bigger than they otherwise would have been and the very bigness of some of these groups caused some of this problem because the bigger something is and the newer it is, the harder it is to manage. And I do think there were some serious management problems which might not have occurred.”

Then there are the derivatives. There, Clinton pleads guilty. Alan Greenspan, the Federal Reserve chairman, opposed regulation of derivatives as they came to the fore in the 1990s, and Clinton agreed. “They argued that nobody’s going to buy these derivatives, we’ll do it without transparency, they’ll get the information they need,” he recalled. “And it turned out to be just wrong; it just wasn’t true.” He said others share blame, including credit-rating agencies that underestimated the risk. But he accepts responsibility as well. “I very much wish now that I had demanded that we put derivatives under the jurisdiction of the Securities and Exchange Commission and that transparency rules had been observed and that we had done that. That I think is a legitimate criticism of what we didn’t do.” He added: “If you ask me to write the indictment, I’d say: ‘I wish Bill Clinton had said more about derivatives. The Republicans probably would have stopped him from doing it, but at least he should have sounded the alarm bell.’ ”

For all that, Clinton insisted he never would have let the housing bubble grow into the problem it became (never mind the high-technology bubble that burst on his watch) and would have stepped in if he were president to prevent the free fall. “When anybody asks me that,” he told me, “I ask them, I look at them and ask them: ‘Do you think this would have happened if we had been there? Look me in the face and say yes.’ I haven’t found any takers yet.”