The Guys Who Got It Wrong
Obama's Economic Brain Trust
By PAM MARTENS
America is held out to the world as a meritocracy. You work hard, you play by the rules, you make sound judgment calls, you succeed. That’s the American dream. Right? That’s what the President of the United States should exemplify in his actions. Right?
Then how does one explain the individuals who represent the abject failures of financial and regulatory theory chosen by the President to dominate the dialogue on financial reform. How does one reconcile President Obama appointing Lawrence Summers as head of the National Economic Council after Mr. Summers played a central role in rolling back the safeguards that led to the current financial crisis.
This is what Mr. Summers had to say at the November 12, 1999 signing ceremony for the Gramm-Leach-Bliley Act, the draconian legislation that repealed the Glass-Steagall Act and allowed commercial banks holding insured deposits to merge with investment banks, brokerage firms and insurance companies: the very same combinations that led to the 1929 stock market crash and ensuing Great Depression:
“Let me welcome you all here today for the signing of this historic legislation. With this bill, the American financial system takes a major step forward towards the 21st century, one that will benefit American consumers, business, and the national economy for many years to come…I believe we have all found the right framework for America's future financial system.”
Mr. Summers was wrong. This was not the “framework for America’s future” but the framework for epic financial collapse. Why isn’t Mr. Summers in an unemployment line along with the millions of Americans his bad judgment call put out of work. more