History of the current financial crash

[sharder8]

Chuckie and his friends are blaming the Democrats . . . MTA and his friends are blaming the Republicans . . . ScottW and his friends are blaming President Bush . . . SJ and his friends are blaming the masons or illuminatti or skull and bones . . . (Thanks for the reminder Epi! )

The fact is, both the Republicans and the Democrats are to blame and it all started prior to President Bush . . .

Here is an interesting read on the history of it.

Quote:

The last time Congress seriously debated how to regulate the financial industry, the result was legislation that allowed the nation's largest banks to get even larger and take risks that had been prohibited since the Great Depression. A look back at that debate, which was over the 1999 Financial Services Modernization Act, reveals that campaign contributions may have influenced the votes of politicians who, a decade later, are now grappling with the implosion of the giant banks they helped to foster.

Looking back at the vote on the 1999 act, and the campaign contributions that led up to it, the nonpartisan Center for Responsive Politics has found that those members of Congress who supported lifting Depression-era restrictions on commercial banks, investment banks and insurance companies received more than twice as much money from those interests than did those lawmakers who opposed the measure.

In 2008, until the U.S. government threw a taxpayer-funded lifeline this month to Wall Street banks drowning in a sea of bad debt, the potential for these financial giants to go under had been dismissed. The banks were "too big too fail." It was the 1999 legislation, commonly referred to as Gramm-Leach-Bliley (for its sponsors' names), that cleared the way for these companies to grow so large.

For decades before, the financial industry had been segregated by government regulations dating to 1933, when Congress passed, and President Franklin Roosevelt signed, legislation known as the Glass-Steagall Act. Sponsored by a former Treasury Secretary known as the "father of the Federal Reserve," Virginia Democrat Carter Glass, and Alabama Democrat Henry Steagall, the law responded to concerns that over-speculation by banks during the 1920s contributed to the stock market crash of 1929 and, in turn, the Great Depression. Commercial banks were taking too many risks with their depositors' money. Glass-Steagall set up a regulatory wall between investment banking and commercial banking, prohibiting commercial banks from underwriting insurance or securities.

Sixty-six years later, in 1999, the financial services industry succeeded in essentially shattering Glass-Steagall, after putting a number of cracks in the law over the intervening years.

(As with the 1933 act, those in the know often use the names of the Financial Services Modernization Act's chief sponsors when referring to it: Gramm-Leach-Bliley. Former Texas senator Phil Gramm is now vice chairman of Wall Street firm UBS and advised John McCain's presidential campaign. Jim Leach, a Republican congressman from Iowa, is retired from Congress and supports Barack Obama for president. Tom Bliley, a Republican congressman from Virginia who chaired the House commerce committee, is now a Washington lobbyist, representing clients including the Commercial Mortgage Securities Association.)

The congressional vote on Gramm-Leach-Bliley in November 1999 was not close. The bill passed handily with bipartisan support in both the House of Representatives and Senate, 450-64 between the two chambers. President Bill Clinton supported the legislation and readily signed it. There were some strong arguments for the bill, chiefly that American banks were too constrained to compete with German and Japanese banks. There was also criticism that the legislation was pushed through too quickly and that it didn't modernize the marketplace's regulatory system. Pressing most aggressively for Gramm-Leach-Bliley was Citigroup, which had merged its bank with Travelers insurance company, and needed a change in federal law to keep the giant corporation together.

The finance, insurance and real estate sector contributed more than $86 million to members of Congress between 1997 and the key vote on Gramm-Leach-Bliley in November 1999. As the graph below shows, on average, those lawmakers voting "yea" received about $180,000 in campaign contributions from individuals and PACs in the financial sector during that period. Those who voted "nay" received about $90,000 each, or half of what supporters got.

There was little difference in the money collected by Republicans who supported the bill and those who opposed it; the 255 GOP supporters collected an average of $179,175, while the opponents in their ranks-and there were only five of them-collected $171,890. On the Democratic side, however, there was a wide gulf, as the graph indicates. The 195 Democrats who supported the Financial Services Modernization Act had received an average of $179,920 in the two years and 10 months leading up to its passage, while the 59 Democrats who opposed it received just $83,475.

Many of the Democrats who voted for Gramm-Leach-Bliley are still in Congress, as are many of the Republicans. Republican presidential nominee John McCain was recorded as absent for the 1999 vote. Democratic nominee Barack Obama was not serving in the Senate then, but his running mate, Joe Biden, supported the bill. McCain's running mate, Sarah Palin, was mayor of Wasilla, Alaska, at the time.

For Gramm-Leach-Bliley's Democratic supporters, at least, the contributions from that time suggest they were cozier with the financial sector than the bill's opponents and, thus, more inclined to vote for a piece of legislation that -- at least until Wall Street's recent collapse -- greatly benefited their contributors.

The new law paved the way for financial institutions, which were already large, to get even larger, and it put businesses that the nation's financial regulators had intentionally segregated under the same umbrella once again. Critics of Gramm-Leach-Bliley predicted that if these mega-banks were to ever fail, the impact on the U.S. and global economy would be so great that the public treasury -- i.e. taxpayers -- would have to rescue them.

Nine years later, Congress is debating a proposal from the Treasury Secretary to assume the bad investments that are weighing down the nation's financial institutions, at taxpayer expense. And lobbyists representing the financial services industry are trying to once again shape fast-moving legislation to their clients' benefit. Whether campaign contributions will again correlate to congressional votes remains to be seen.

Source

[jokostel]

Finally....

sometimes neutrality saves the day.

[sharder8]

Let's take it forward another step and look at who got the money, how much, and how they voted on the Financial Services Modernization Act back in 1999 and continuing on to present.

This is only the top 6 . . . the rest of the lawmakers and their amounts can be found at the source.

Quote:

Office First Last P State GrandTotal Vote

S Hillary Clinton (D-NY) $31,040,714
S Barack Obama (D) $27,942,613
S John McCain (R) $26,593,411 A
S John Kerry (D-Mass) $19,094,828 Y
S Christopher J. Dodd (D-Conn) $13,204,556 Y
S Charles E. Schumer (D-NY) $12,795,946 Y

Source

You'll note that Hilary and Obama didn't vote, as they weren't in office at the time of the vote. However, they've still collected money from the Financial sector.

Harder

[Gomer]

Quote:

Originally Posted by sharder8

Let's take it forward another step and look at who got the money, how much, and how they voted on the Financial Services Modernization Act back in 1999 and continuing on to present.

This is only the top 6 . . . the rest of the lawmakers and their amounts can be found at the source.


Source

You'll note that Hilary and Obama didn't vote, as they weren't in office at the time of the vote. However, they've still collected money from the Financial sector.

Harder

Even Ron Paul is dirty!!! (in the top quarter of the list) say it ain't so!

[Disley]

Quote:

Former Texas senator Phil Gramm a Republican is now vice chairman of Wall Street firm UBS and advised John McCain's presidential campaign. Jim Leach, a Republican congressman from Iowa, is retired from Congress and supports Barack Obama for president. Tom Bliley, a Republican congressman from Virginia who chaired the House commerce committee, is now a Washington lobbyist, representing clients including the Commercial Mortgage Securities Association.)

Let's give these men the credit for introducing the bill.

[jokostel]

You don't get it do you Disley?

Republican or Democrat.... doesn't matter.
They are ALL part of the problem.

So, for now... take your head out of the sand and start to try and see things from beyond your screwed up ways....


To break these "chains" this country has, we need to do some serious house cleaning.

[sharder8]

Quote:

Originally Posted by Disley

Let's give these men the credit for introducing the bill.

They sponsored the bill . . . majority of Republicans and Democrats voted for it . . .

Both parties are DIRTY!!!



Harder

[Disley]

Oh I get it, most of the politicians the whole world over are easily bribed, but I also understand that select ones amongst them are used to sponsor the bills that change the rules, watering down the publics protection.
The majority are to lazy to try to change anything, the only time you see them in motion is when they get in the queue for a handout/bribe, by the lobby group that in this case probably wrote the bill.

[roadtech]

As he said. Until the whole system is changed.
We will see the same BS.

[outlaw2001it]

Quote:

Originally Posted by roadtech

As he said. Until the whole system is changed.
We will see the same BS.

Exactly. Until we get these lobbyists out of the mix, and return the government back to the people there is only one way to go, and that's down.