Blogs > Liberty and Power > That's Politics for You

Aug 21, 2009 12:22 am

That's Politics for You

I found this interesting tidbit in Wikipedia's entry on the Gramm-Leach-Bliley Act:

Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act...

G-L-B, the last significant bank deregulation that occurred in the U.S., repealed the part of the New Deal's Glass-Steagall Act that forbade a single institution from engaging in both commercial and investment banking. G-L-B was passed by the Republican-controlled Congress in 1999 and signed by Democratic President Clinton. His treasury secretary at the time was Larry Summers, now President Obama's top economic adviser. It's important to remember this when people say that banking deregulation during the Bush years created the economic mess. The Bush administration didn't deregulate anything of importance. G-L-B in no way contributed to the financial turmoil.

What's important about the quote is that it shows that the Republicans acquiesced in the strengthening of the Community Reinvestment Act, which is partially at fault for the mortgage meltdown. This is the law that compelled banks to increase their mortgage lending to people with low incomes and poor credit histories.

As we've long noted, both parties are guilty of creating the house of cards that has fallen.

Cross-posted at Anything Peaceful.

comments powered by Disqus