Monday, April 19, 2010

Bill Clinton and Obama are Responsible for the Derivative Fallout

Bill Clinton says he takes part responsibility for the Derivative fiasco that took the financial market in deep trouble. Clinton says he had bad advice on Derivatives by his top economic advisers. But ironically, Obama and Clinton are blaming all this on George Bush for contributing to the financial crisis with lax regulation. This is very typical of Democrats. Never take responsibility; and if they become at fault, blame the problem on someone else.

The Derivative Market fiasco can be blamed on Bill Clinton himself as he signed into the law the removal of the Glass-Steagall Act. This Act was designed after The Great Depression when there were huge widespread bank failures. In 1933, Congress enacted this new law to prevent banks from inappropriate securities actives that harmed investors. In particular, critics charged that if a bank had a bad loan to a failing company, it would sell securities to pay off the loan and leave investors with the poor investment. So, this federal legislation was passed to separate between investment and commercial banking firms and prohibit banks from owning corporate stock.

But when Clinton signed the law in 1999 to remove this Act, guess what happened? It allowed the banking system to completely spin out of control with fraud and corruption. It lined the pockets of bank CEO, the politicians, and of course, Bill Clinton. So, the collapse of the banking and financial system in 2008 was due to Clinton’s greed and he blames this on his top economic advisors for making the wrong decision for him.

We cannot blame all this on Clinton. We need to add Obama into the mix because he took in many people who served under Clinton that contributed to this mess. Clinton blames his top economic advisor Larry Summers for the Derivative fiasco and Obama bring Larry Summers in as his chief economic policy guru. Yeah, that makes sense. Then you have the tax cheat Tim Geithner who was part of the Clinton Administration. And of course we cannot forget SEC Chief Mary Shapiro, who was a Clinton crony responsible for derailing Derivative legislation.

If Obama had to bring in many old members of the Clinton Administration back to the White House, what does it say about the judgment and character of our current president? If failed policies of the Clinton era were a disaster, what makes you think it will work with another Democrat president? So, before you put blame on Bush, you need to see the whole story before making that determination. Obama needs to fix the problem and not putting a band-aid on it. You don’t fix the financial mess by allowing the government to take over. Oh yeah, that will work (sarcasm)!