(5) the 1999 Gramm-Leach-Bliley Act. It repealed Glass-Steagall. The 1930s law separated commercial from investment banks and insurers, among other provisions curbing speculation.
(6) the 2000 Commodities Futures Modernization Act. It's so bad, it was tucked away in an appropriations bill near the end of Clinton's tenure. It was his final public betrayal, and what a whopper to endorse.
It legitimized "swap agreements" and other "hybrid instruments" at the core of today's problems. It prevented regulatory oversight of derivatives and leveraging. It made Wall Street a casino operating on only the house wins rules.
Among other provisions, it contained the "Enron Loophole." Enron Online became the first Internet-based commodities transaction system. It rescinded regulations in place since 1922.
Derivative scams went wild. Enron fleeced investors and energy purchasers with impunity until its house of cards collapsed.
Alan Greenspan endorsed derivatives at the time. He lied calling them a way to share risks. They turned an economic downturn into the greatest Depression for most households. They're either impoverished, bordering on it, or heading for it before decade's end. A Clinton-Greenspan combo made it possible.
Black could have listed many more legislative and deregulatory public betrayal examples, including Obama's so-called financial reform only bankers could love. They should. They wrote it. It assures business as usual codified into law under a reform mantle.
Black moved on to the 2012 JOBS Act. He called it "the product of a feeding frenzy by lobbyists who are finally able to enact every fraud-friendly provision they ever dreamed of making law. The only kind of financial bill that can pass with overwhelming support is an anti-regulatory" one.
The criminal class in Washington is bipartisan. FIRE sector (finance, insurance and real estate) companies are their largest contributors. Whatever they want, they get. Through the ages, greasing palms worked like charms. In large enough amounts, they always work.
Black said financial crises embrace "three (bipartisan) 'de's' - deregulation, desupervision, and de facto decriminalization." They create epidemics of fraud. Real reform's impossible. Greater crises are assured. Each time, looser restrictions follow. Economies, households, and lives are destroyed for profit.
Since the late 1970s, America "trashed a regulatory system that was the envy of the world." Now it's a travesty.
Black called the JOBS Act "insane on many levels. It creates an extraordinarily criminogenic environment in which securities fraud will become even more out of control."
It continues a regulatory "race to the bottom. The only winning move is not to play...." The bill's rationale is deregulatory madness must be won. Otherwise the City of London and/or other financial centers will surpass us.
Its passage ignored the Financial Crisis Inquiry Commission's (FCIC) findings. It was established to determine the current crisis' cause. It explained the three "de's" problem. It specifically condemned "regulatory arbitrage." It revealed destructive deregulatory madness.
The JOBS Act ignored expert anti-fraud input. The best, brightest, and most honest unanimously condemned the bill. Enacting it also bypassed others "who designed and implemented successful means to limit the crises, who prevented problems through effective supervision from becoming crises, and who held" criminal bankers accountable.
Further, people who got everything wrong earlier designed the Act. Failure's institutionalized. So is fraud. What succeeds gets trashed.