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Senator predicts economic crisis 10 years ago on passage of banking act in New York Times article
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How much did they know 10 years ago? (AP Photo/Stephen Chernin)
New York Times quote Nov. 5, 1999 on the passage of a key banking act: "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." The quote was made by Senator Byron Dorgan of North Dakota ten years ago in discussing the passage by Congress of a major banking act which set the stage for the current economic crisis and banking fiasco.
In hindsight, this highly revealing New York Times report was quite prescient. The article begins, "Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses." The bill was approved by large majorities in both houses of Congress, showing the power of lobbyists from the banking sector.
Then Secretary of Treasury Lawrence Summers commented, "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century. This historic legislation will better enable American companies to compete in the new economy." How much did he and others know that this act would stuff the pockets of the big bankers and financiers and end up tanking U.S. and global markets and depleting the savings of investors worldwide.
Though largely supportive of the new act, the Times article also raised serious questions which are very cogent today as we struggle to understand what went wrong.
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression. The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.
You can read the entire revealing article on the New York Times websites at this link. In the article, Senator Paul Wellstone of Minnesota also raised serious questions about the act, stating that Congress had ''seemed determined to unlearn the lessons from our past mistakes.'' He felt that the new act could destabilize our entire economy. Wellstone, considered at the time to be the most progressive U.S. Senator, was vociferous in support of workers' rights and against the disproportionate power of the bankers and lobbyists. He died under very strange circumstances in his 2002 bid for reelection.
Below is an incisive and revealing PBS interview with William Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, on the roots of the economic crisis. If you want to understand the deep politics behind our current crisis, don't miss this one.
Don't let all of this get you down. The box below provides several ideas on what you can do to educate yourself, spread the word, and make a difference in building a brighter future. We also invite you to comment below and let us know what you think. Who was really behind the current banking and economic crisis?
What you can do:
- Inform your media and political representatives of this important information. To contact those close to you, click here. Urge them to get to the roots of the current economic crisis and bring justice to those who knowingly supported the crash.
- Learn more about key hidden knowledge of banking and the Federal Reserve at this link.
- Read concise summaries of revealing major media reports on the banking bailout available here.
- Visit www.WantToKnow.info to learn more about what they don't want you to know.
- Spread this news to your friends and colleagues, and bookmark this article on key news websites using the "Share This" icon just below the title of this article, so that we can fill the role at which the major media is sadly failing. Together, we can make a difference.
Fred Burks served as personal language interpreter to Clinton, Bush, Cheney, Gore, and other top dignitaries in secret meetings. As part of an international network of researchers and news analysts, Fred obtains and disseminates key, reliable information about powerful, yet little-known forces which shape our world. For more, see articles and links in the right column of this page.
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