I wonder if Paulson's hands off approach is now culminating in the Big Banks with all their toxic crap, now having the capacity to drive otherwise solvent smaller banks into the dirt and buying them out for a song? Thus helping to off-set the scumbags sins when values reset.
"What we need is an honest accounting of how we got into this mess, beginning with an investigation of the role of Goldman Sachs as the most insidious Wall Street player."
BB, giving credit where credit is due...
Geithner was a protege of Rubin in that effort, as was Lawrence Summers, who went on to be Clinton's treasury secretary after Rubin left to head Citigroup. Regrettably, Summers is now the key White House economics adviser.
Rubin, Geithner and Summers are hell-bent on denying the responsibility of their deregulation initiatives for the economic crisis.
But, the reality is that the merger of investment and commercial banks with insurance companies and stockbrokers was illegal — until the approval of their legislation reversing the Glass-Steagall Act, which was passed under President Franklin Roosevelt.
So, too, the newfangled financial instruments exempted from any government regulation thanks to the Commodity Futures Modernization Act, which Summers got Clinton to sign into law a month before he left office.
The reversal of Glass-Steagall unleashed the robber barons, as was freely conceded by Goldman's Blankfein in an interview he gave to the New York Times in June 2007. "If you take a historical perspective," Blankfein said, gloating back then about the vast expansion of Goldman Sachs, "we've come full circle, because that is exactly what the Rothchilds or J.P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass-Steagall Act."
The "aberration" being the sensible regulation of Wall Street to prevent another Depression, which now seems dangerously close at hand. Since Glass-Steagall was repealed in 1999, Goldman Sachs experienced a 265 percent growth in its balance sheet, totaling $1 trillion in 2007.
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