What follows is based largely on a report by Robert Scheer.
That Lawrence Summers, a president emeritus of Harvard, is a consummate distorter of fact and logic is not a revelation. That he and Bill Clinton, the president he served as treasury secretary, can still get away with disclaiming responsibility for our financial meltdown is an insult to reason.
Summers, like Clinton, still defends the reversal of the 1933 Glass-Steagall Act, a 1999 repeal that destroyed the wall between investment and commercial banking put into place by Franklin Roosevelt in response to the Great Depression. Here's what Summers said:
"I think the evidence is that I am right about that. If you look at the big players, Lehman and Bear Stearns were both standalone investment banks." (Both banks are now defunct.)
Summers is very good at obscuring the obvious truth that the too-big-to-fail banks, made legal by Clinton-era deregulation, required taxpayer bailouts.
Summers also knows full well that the passage of the repeal of Glass-Steagall was pushed initially by Citigroup, a mammoth merger of investment banking and commercial banking that created the largest financial institution in the world -- an institution that because of its reckless derivatives scams and derivatives gambling eventually had to be bailed out with taxpayer funds to avoid economic disaster for millions of ordinary Americans. Summers also knows that Citigroup (where Robert Rubin played leading roles during a critical time) specialized in precisely the mortgage scams, and other debt package and insurance scams, that were the source of America's economic crisis!
Even Clinton, in a rare moment of honest appraisal of his record, conceded that his signing of the Commodity Futures Modernization Act, which legalized all those credit default swaps (billions of dollars-worth of extremely risky insurance policies) and the billions of dollars-worth of toxic collateralized debt obligations which they insured, was based on bad advice. But please understand: That advice to Clinton, to pass the CFMA, would have had to come from Summers, his point man for pushing the CFMA legislation that Clinton signed into law (during his lame-duck days).
Also understand that the CFM Act not only legalized the casino capitalism of super-risky "swaps' and (what turned out to be) collateralized toxic vapor, but also made it illegal to regulate the casino. Ex-Sen. Phil Gramm (R-TX), once known as the meanest man in the Senate (whose wife Wendy profited astronomically from the "new economy" of toxic junk and scam), had the audacity to accuse Americans of being "whiners" for objecting to the theft of their life savings and homes! He also happened to be the author of that little anti-regulation modification that was at the last minute tacked on to the CFM Act, before it passed at midnight in a virtually empty chamber.
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