October 1, 2008
No, It Wasn't Phil Gramm's Fault
Against an avalanche of evidence that our current financial problems resulted from mismanagement and corruption on the part of Democrats and their cronies, especially at Fannie Mae, the Democrats have responded that it's all due to Phil Gramm's "repeal" of Glass-Steagall. The facts, and Bill Clinton, say otherwise.
The bill they are talking about is the Gramm-Leach-Bliley Act. The facts are summarized nicely in the Atlantic . President Clinton's take is summarized in the Wall Street Journal , liberally quoting our former President.
"I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill.
"On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence.
"I can't blame [the Republicans]. This wasn't something they forced me into."
It looks like no one was forced into it. According to the WSJ,
The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle -- oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.
President Clinton has gone further than saying Gramm-Leach-Bliley was not the culprit; he blames Democrats for being too loose with Fannie and Freddie.
Democrats for years have been "resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac."
Will John McCain be as forthright as Bill Clinton? Maybe.