In an interview on This Week with Jake Tapper, President Bill Clinton said he made a mistake listening to Bob Rubin and Larry Summers on derivatives, and said he should have tried to regulate them, despite Republican opposition:
TAPPER: One of the things that President Obama is pushing for is regulation of derivatives, and also with a thing called the Volcker rule, he’s trying to separate commercial banking interests from investment banking interests.These were things that were the opposite policies of Treasury Security Rubin and Summers at that time, do you think in retrospect they gave you bad advice on these issues?
CLINTON: Well, I think on the derivatives – before the Glass-Steagall Act was repealed, it had been breached. There was already a total merger practically of commercial and investment banking, and really the main thing that the Glass-Steagall Act did was to give us some power to regulate it – the repeal. And also to give old fashion traditional banks in all over America the right to take an investment interest if they wanted to forestall bankruptcy. Sadly none of them did that. Mostly it was just the continued blurring of the lines, but only about a third of all the money loaned today is loaned through traditional banking channels and that was well underway before that legislation was signed. So I don’t feel the same way about that.
I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go. I think if Arthur Levitt had been on the job at the SEC, my last SEC commissioner, an enormous percentage of what we’ve been through in the last eight or nine years would not have happened. I feel very strongly about it. I think it’s important to have vigorous oversight.
Now, on derivatives, yeah I think they were wrong and I think I was wrong to take it because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don’t need any extra protection, and any extra transparency. The money they’re putting up guarantees them transparency. And the flaw in that argument was that first of all sometimes people with a lot of money make stupid decisions and make it without transparency.
And secondly, the most important flaw was even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect a 100 percent of the investments, and indeed a 100 percent of the citizens in countries, not investors, and I was wrong about that. I’ve said that all along. Now, I think if I had tried to regulate them because the Republicans were the majority in the Congress, they would have stopped it. But I wish I should have been caught trying. I mean, that was a mistake I made.
Yeah, he’s sorry now that he destroyed Haiti’s agricultural economy, and he’s sorry now that he helped destroy America’s economy, but back then he had to do it to keep his good relations with the rich bankers. Now that he is comfortably rich and secure himself, he can apologize for these thing that some people at the time knew to be wrong.
I can’t stand to look at the man. I couldn’t then, and I REALLY can’t now.
Bill, the Original Big Blue Dog.
He’s right about Arthur Levitt.
Well yeah, pragmatic, Bill screwed up then and some of us knew it. So how long before we can expect W. to come out with an apology for the getting us into two wars and running up more debt than any president ever? Should we hold our breaths?
Listening to a bit longer part of Bill Clinton’s mea culpa about what he was told by Rubin and Summers and what he felt was not a huge risk at the time, but now sees as very bad indeed, I realized why Wall Streeters had to get Hillary out of the race. At the time, she was against some of those economic things Bill let through, he now sees are wrong, and the two of them have the intellectual capacity to understand the Street’s games and reply to the monied class in a way the general public could understand.
(Making complex issues germane and understandable was and is one of Bill Clinton’s gifts. His rhetoric doesn’t soar, but he gives ideas wings. He enlightens people, instead of blinding them with some abstract light.)
Hillary, with an enlightened Bill at her side, would not have let Wall Street get away with what they have so far. They could not have pulled the wool over her eyes as they had with the young president we have.
What an excellent investment for the corporatists! And it’s the FIRE corporatists, who have little use for actual businesses which employ lots of people and produce products people actually use.
Water off duck’s back
“Hillary, with an enlightened Bill at her side, would not have let Wall Street get away with what they have so far. They could not have pulled the wool over her eyes as they had with the young president we have.”
More wishful thinking from the Hillary worshipers. You can keep clinging to that fantasy but I doubt she would have done significantly better than Obama has done thus far. Congress is, and has been the real problem all along.
A Democratic Congress led by this Democratic president has been the problem. Obama does not a free pass on what’s happened inside his administration and how he himself has worked to enable Wall Street.
Big Banksters knew there would be a Dem winning in ’08 –they had to be sure they had someone who wouldn’t disturb their nice little casino too much while in office. Obama fit their bill…so to speak.