One of the phrases I most hate from politicians is “we will make sure that this never happens again”
Why, because politics is all about short term popularity and these words satisfy the press and the headline writers today. The press, who in a democracy, should bring politicians to account will never sell news papers by reminding the public that seven days ago a politician said “we will make sure that this never happens again”
A good example of this is the deregulation that was brought in by President Clinton who supported proposed Republican legislation to remove all the protection in the banking system in 1999. This is now being sorted out by another Democrat President Barack H. Obama today, although for some reason the deregulation took months and the sorting out will take five years.
President Clinton was the first Democratic president since Franklin D. Roosevelt to win a second term. This is ironic because the deregulating in 1999, unwound legislation brought in 1933 by Franklin D. Roosevelt. The legislation that Roosevelt brought in was in response to a financial collapse in 1929-1931 that I hope I do not need to remind you of. Senator Byron Dorgan was very clear in 1999 and even forecast the effect of the deregulation and the time it would take. Please have a listen to http://www.youtube.com/watch?v=0hh8EubXDV0
In his comments he says that in spite of all the sophisticated measures he still thinks that the number of shifts at the Spam factory is a very good economic indicator, and you know I agree with him.
I know it is 55 mins but the main points are only between 18-30 mins. The utube summary of the article says
Long before the complete meltdown of the financial industry last fall, Senator Byron Dorgan warned us about the risks posed by one of the key ingredients in that catastrophe: the complex financial packages known as derivatives. In a Washington Monthly cover story, "Very Risky Business" (October 1994), the North Dakota Democrat predicted with uncanny precision what actually happened in September 2008 -- the cascading failures of large lending institutions, the collapse of Fannie Mae, taxpayer-funded bailouts -- and speculated that a derivatives-driven financial crisis would eventually leave Americans "nostalgic for the days of the $500 billion savings-and-loan collapse."
In 1999, Dorgan was one of eight senators to vote against the Gramm-Leach-Bliley Act, which repealed Depression-era banking regulation, cautioning at the time that deregulation "would raise the likelihood of future massive taxpayer bailouts."
Ten years and trillions of taxpayer dollars later, Sen. Dorgan is one of Congress' leading voices for financial re-regulation. Please join Sen. Dorgan at the New America Foundation for a conversation on how we arrived at the crisis and what common-sense regulations are needed to make sure it never happens again.
You may wonder why things changed in 1999; I believe that it was because advisors at the time were overcome with greed and saw this deregulation as way of making money and careers for themselves. Many of them moved on to the very banks that were deregulated and collapsed, when Bush was elected.