Reich: Summers, Greenspan Haven't Got a Clue

Thursday, 15 Apr 2010 09:01 AM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
If any three people are most responsible for the failure of financial regulation, they are Alan Greenspan, Larry Summers and Robert Rubin, says economist Robert Reich.

“I dislike singling out individuals for blame or praise in a political system as complex as that of the United States, but I worry the nation is not on the right economic road, and that these individuals — one of whom advises the president directly and the others who continue to exert substantial influence among policy makers — still don’t get it,” Reich writes in his blog.

In 1999 Reich notes, the three advised Congress to repeal the Glass-Steagall Act, which since 1933 had separated commercial from investment banking, even though the repeal had Wall Street “salivating … because it wanted to create financial supermarkets that could use commercial deposits to place bets in the financial casino” that would yield the Street trillions.

Simultaneously, the three quashed the efforts of the Commodity Futures Trading Corporation to regulate derivatives when its director began to worry that derivative trading already was getting out of control.

Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton, says that both financial reform bills now before Congress are filled with loopholes that would allow reckless trading of derivatives to continue.

“Neither bill begins to rectify the basic distortion in the national economy whose rewards and incentives are grotesquely tipped toward Wall Street and financial entrepreneurialism, and away from Main Street and real entrepreneurialism,” says Reich, now a professor of public policy at the University of California at Berkeley.

In January, Peter S. Roberson, a former Congressional aide who worked on legislation to overhaul the nation’s financial regulations, left to work for the world’s top clearinghouse for over-the-counter derivatives, The New York Times reports.

Such clearinghouses stand to gain billions of dollars in new business as a result of the legislation.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

George Will: I Am a 'Low-Voltage Atheist'

Monday, 22 Sep 2014 23:54 PM

In a wide-ranging interview, Pulitzer Prize-winning writer George Will discusses baseball, politics, and his status as a . . .

Dick Morris: Obama Has Secret Agenda

Monday, 22 Sep 2014 22:53 PM

What is Obama's real end game?
Now, for the first time, noted political strategist Dick Morris reveals Obama's secr . . .

Ex-UN Ambassador Wallace: US Should Just Say It - We're at War

Monday, 22 Sep 2014 19:55 PM

The United States should stop going out of its way to avoid calling the military initiative against the Islamic State (I . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved