Wednesday, April 1, 2009

From 1999: Foreshadows of the Economic Crisis

From Flutterby, a 1999 New York Times article about the passage of the Gramm-Leach-Bliley Act. This act removed some of the safeguards put in place after the Great Depression. (Some claim that this was a significant contributor to the current crisis. Others disagree.)

Sen Phil Gramm (R-TX) arguing for the repeal:
We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.
Rep Jim Leach (R-IA), in favor of the repeal:
This is a historic day. The landscape for delivery of financial services will now surely shift.
Sen Bob Kerrey (D-NE), in favor:
'The concerns that we will have a meltdown like 1929 are dramatically overblown.
Now for the dissent:

Sen Dorgan (D-ND), arguing that it removes safeguards that could lead to a financial crisis:
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 lessons of the past, and that that which is true in the 1930's is true in 2010.
Sen Paul Wellstone (D-MN), against:
[Congress] seemed determined to unlearn the lessons from our past mistakes.

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