The Clintons have no shame, that much you can count on. That stupefying arrogance was on full display in the most recent presidential campaign debate when Hillary Clinton countered Bernie Sanders’ charge that she was compromised by her close ties to Goldman Sachs and other rapacious Wall Street interests with the retort: “Sen. Sanders, you’re the only one on this stage that voted to deregulate the financial markets in 2000, ... to make the SEC and the Commodity Futures Trading Commission no longer able to regulate swaps and derivatives, which were one of the main causes of the collapse in ’08.”
Hillary knows that the disastrous legislation, the Commodity Futures Modernization Act (CFMA), had nothing to do with Sanders and everything to do with then-President Bill Clinton, who devoted his presidency to sucking up to Wall Street. Clinton signed this bill into law as a lame-duck president, ensuring his wife would have massive Wall Street contributions for her Senate run.
Sanders, like the rest of Congress, was blackmailed into voting for the bill because it was tucked into omnibus legislation needed to keep the government operating. Only libertarian Ron Paul and three other House members had the guts to cast a nay vote. The measure freeing Wall Street firms from regulation was inserted at the last moment in a deal between President Clinton and Senate Banking Committee Chairman Phil Gramm, R-Texas, who had failed in an earlier attempt to get the measure enacted. Clinton signed it into law a month before leaving office.
Sanders soon figured out that he and almost all other Congress members had been tricked into providing a blank check for the marketing of bogus collateralized debt obligations and credit default swaps made legal by the legislation, of which a key author was Gary Gensler, the former Goldman Sachs partner recruited by Clinton to be undersecretary of the treasury.
Eight years later, when President Obama nominated Gensler to head the Commodity Futures Trading Commission, it was Sanders who put a temporary hold on the nomination, stating: “Mr. Gensler worked with Sen. Phil Gramm and [former U.S. Federal Reserve Chairman] Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of AIG and has resulted in the largest taxpayer bailout in U.S. history.”
Today, Gensler is the top economic adviser to Hillary Clinton’s presidential campaign. And the CFMA—key legislation that was “one of the main causes of the collapse in ’08,” enabling the great recession—is an enormous embarrassment that her husband on occasion reluctantly has conceded was drafted by his top aides and signed into law by him with great enthusiasm.
In an awkward power-couple footnote, Greenspan, chief prophet of radical banking deregulation, is married to NBC journalist Andrea Mitchell, one of the two debate moderators Sunday night, who pointedly challenged Sanders with questions about his integrity in his call for reform of the economy. But not as awkward as Hillary having been prepped by her debate adviser Gensler to attack Sanders for his vote for legislation that Gensler wrote when working for her husband.
Who are these Clintonites who now have the temerity to blame Sanders for the economic hustles they authorized?
Gensler in 1999 testified before Congress in support of the total deregulation of toxic derivatives: “OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world.” As for the credit default swaps, the phony insurance packages that brought AIG to its knees and almost destroyed the world economy, Gensler testified that they should be exempted by his proposed legislation from regulation existing under the Commodity Exchange Act: “swap transactions should not be regulated under the CEA.” Had they been, the financial crisis could have been avoided.
Along with Gensler, Robert Rubin, who was Clinton’s treasury secretary and a former Goldman Sachs chairman, and Lawrence Summers, a Rubin aide who succeeded the treasury secretary before the bill was passed, engineered this legislation, which became law and which Hillary Clinton now has the effrontery to blame on Bernie Sanders.
The same Rubin-Summers wrecking crew had also destroyed the sensible restraints on Wall Street greed, implemented as the Glass-Steagall Act by the administration of Franklin Roosevelt in response to the Great Depression. Hillary Clinton defends the repeal of Glass-Steagall’s separation of commercial and investment banking, while Sanders wants it reinstated.
That repeal, as well as preventing any regulation of the toxic mortgage packages and swaps that still hobble the world economy and wiped out the fortunes of black and brown people with particular severity, is Bill Clinton’s horrid legacy, and it is one that his wife now attempts to blame on Bernie Sanders. Shame.