THE ECONOMIC MELTDOWN -- 3 people most responsible, reprinted from Newsmax t

 I am reprintinn this article from Newsmax of today's date in part to justify my pervious post on who and what caused the meltdown of the economy as I try to dispel the dishonest claims of the Obama supporters ...."failed policies of the past." We had a failure, to be sure, but not quite like Obama, Clinton and their shills report. Note the Clinton-Rubin connection and, of course, Larry Summers who followed as Obama's chief economic advisor after losing a Billion plus dollars for Harvard's endowment fund. Note also Gramm and Gramm-Bliley I referred to. This is the first write I have seen with this specificity since the collapse in 2008. HOWEVER, THE AUTHOR LEAVES OUT ONE IMPORTANT PLAYER WHO SIGNED OFF ON THE LEGISLATION AND ISSUED AN EXECUTIVE ORDER THAT LED TO THE EXPLOSION OF SUB-PRIME MORTGAGES FOR THESE BANKERS TO FEED UPON THROUGH FANNIE MAE AND FREDDIE MAC.......PRESIDENT BILL CLINTON.
JAM, 11 SEPT. 2012.

The Three Washington Insiders Who Helped Wall Street Destroy America

by Shah Gilani, Editor, Wall Street Insights & Indictments
There are millions of Americans who sense there’s something terribly wrong with our capitalist system. They can’t pinpoint exactly what it is.
But I can.
Bad actors have done bad things to good institutions and our capitalist system. Today, I’m going to let you in on who three of those bad actors are.
You see, part of the problem is that when we think of the “bad guys” on Wall Street, or in Washington for that matter, we don’t often think of specific people. We talk about “them” as faceless men we might imagine sitting in luxurious high-rises chewing on cigars and laughing as they rake in millions, or even billions of dollars on the backs of hardworking Americans.
I intend to fix that. I want to shed light on the faces of the people who are gaming the system and lay out before you the tools they’re using to get away with it.
And I’m going to start with some of the biggest perpetrators behind this mess we’re in.

The Three Bears

There are hundreds of bad actors on Wall Street, but three in particular tell the inside story of how appallingly corrupt our country has become. They are:
  • Robert Rubin, who spent 26 years at Goldman Sachs Group Inc. (NYSE: GS), before becoming Treasury Secretary in the Clinton administration.
  • Lawrence Summers, who came out of the World Bank and was Deputy Secretary of the Treasury under his pal Rubin before becoming Treasury Secretary himself in 1999.
  • And Phil Gramm, once a practicing economist who served as a Republican Senator for Texas from 1985 to 2002.
These are the men who – with help of then-Federal Reserve Chairman Alan Greenspan – interfered with the Commodities and Futures Trading Commission (CFTC), an important regulatory body, to squash any regulation of derivatives.
And now the notoriously murky derivatives market, which was hugely responsible for the 2008 financial crisis, has grown into a $600 trillion trouble spot for the economy.
This group of very influential and powerful men made sure there was no oversight of derivatives products and markets. None.
While that was an incredible gift to Wall Street’s biggest banks and hedge funds, the Three Bears (I call them that because their actions drove us into the systemic economic bear market from which we’re still struggling to emerge) weren’t done yet.
Not even close.

The Beginning of the End

On April 6, 1998, Citicorp and Travelers Group announced that they would merge into a single company.
But there was a problem.
At the time, such a merger would have violated the Glass Steagall Act.
If you’re not familiar with it, the Glass Steagall Act is – or rather was – a piece of Depression-era legislation that established the Federal Deposit Insurance Corp. (FDIC) and mandated the separation of commercial banks, investment banks, and insurance companies. It incorporated other practical and prudent regulations enacted to safeguard investors and the public, as well.
But, lessons learned from the Depression were eventually forgotten – or maybe more precisely, steamrolled - by a sweeping deregulatory movement that took root in 1980.
On the day of the announced combination, Traveler’s Chairman, Sandy Weill, addressed impediments to the merger in the New York Times, noting that current law would allow the new Citigroup Inc. (NYSE: C) time to divest itself of assets in order to comply with Glass-Steagall.
However, he ominously added: “We are hopeful that over time the legislation will change.”
Just one year later, it did.
The same powerful group of influence-peddling government insiders overturned Glass-Steagall in November 1999, so the illegal merger didn’t have to be reversed. The law that obliterated the prudent separation of FDIC-backed commercial banks and swing-for-the-fences investment banks became known as the Gramm-Leach-Bliley Act.
This act is what paved the way for giant, financial super firms that are so intertwined in the financial markets they’re now all considered “too-big-to-fail.”

An Eerie Epilogue

So what happened to our three players?
Were they penalized or held accountable for the undermining of our economy and the implosion of markets?
No. They were rewarded.
Robert Rubin went to work for the new Citigroup as a senior advisor of the firm. Rubin made $126 million in cash and stock during his eight years of service, while the bank leveraged itself up by using depositor money.
It had to be bailed out in 2008.
Lawrence Summers reportedly took some $20 million from D.E. Shaw & Co., a giant hedge fund that dabbles in derivatives, for a two-year stint doing something nobody at the firm could confirm.
And Phil Gramm, the venerable Texas senator, upon retiring from that powerful position, immediately became vice chairman of the investment bank division of UBS AG (NYSE: UBS).
Yes, UBS – the same Swiss bank that in 2008 had to be backstopped by the Swiss National Bank when its overleveraged and derivatives-laden balance sheet imploded. The same bank that later paid $780 million to settle criminal charges over its conspiracy to defraud the Internal Revenue Service (IRS) and federal government of legitimately owed taxes.
These are the kinds of things that are taking place every day thanks to Wall Street’s influence over our executive and legislative branches of government. And you better believe that average Americans and the Occupy Wall Street protestors can sense that, and they know they should be angry. They just can’t put their finger on why.
I can.
That's because I am a Wall Street guy who spent 30 years working within the system. I studied economics and started my career as a trader on the floor of the Chicago Board of Options Exchange (CBOE). I ran the futures and options division of a giant international money-center bank.
I’ve done everything from trading bonds and mortgage-backed securities to running my own hedge funds. And I have hundreds of stories full of corruption and greed – just like this one.
Not everyone on Wall Street is a bad actor. Most of the professionals working in the capital markets across America are good and honest people.
But, there are plenty of kingpins and kingmakers whose greed is so disgusting they will sink the American dream for their own fistful of dollars.
It’s time we had better insights into what’s really going on, and it's past time to indict some of these bad actors.
So stay tuned...

Shah Gilani

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