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View Diary: Bill Clinton: I Shouldn't Have Listened to Summers and Rubin [Substantive Update] (341 comments)

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  •  I agree (1+ / 0-)
    Recommended by:
    ShadowSD

    they're not stupid guys, and it's very possible that they THOUGHT things would turn out one way, and they turned out very different. And if you're not a total ideologue, you'll go 'hmm... maybe that wasn't such a good idea', and you'll adjust.

    Nobody thought things would go this bad, not at first. Remember, those regulations were relaxed 10 yrs ago, and it took at least 5-6 yrs for it to even start looking dicey.

    •  5 or 6 years is not a long time (1+ / 0-)
      Recommended by:
      Badabing

      And let's not forget the muscle used to prevent the CFTC from regulating.

    •  Please, you are not saying 'Nobody saw this (1+ / 0-)
      Recommended by:
      blueoasis

      coming' are you?

      OMG.

      ...oh, not to worry, I'm wearing a Flame Retardant Valentino Orange Moo Moo whenever I visit DailyKos.

      by Badabing on Sun Apr 18, 2010 at 05:38:42 PM PDT

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      •  I know for a fact that at least two people did (1+ / 0-)
        Recommended by:
        Badabing

        Back in '97 or so, when the New York Times forum was still footloose and fancy-free, I remember some lively discussions on the subject of the undoing of Glass-Steagall.  I remember very clearly that two of us were arguing stridently, against a great chorus of Wall Street Pollyannas, that it would lead to exactly the situation we see today "within a decade of enactment."  

        I wish I could get my hands on an archive of those forum threads.

    •  The repeal wasn't in a vaccum either (0+ / 0-)

      A case was made that the derivatives in an of themselves aren't so dangerous when used properly.

      One reason derivatives got their bad smell was the rating agencies pretending that they were playing with investment grade stuff, when it wasn't that at all. in fact, MDS were made up of poor stuff hidden in plain sight. Kind of like "salting the mine" in the old days...

      In Greenspan's mind, and perhaps in Rubin's too, he saw a "free" market operating with Randian market forces, but in fact the market, derivatives, Mortgages, default swaps and all were being seriously gamed, as we now see in the Goldman Sachs/Paulson hedge suit.

      Greenspan acknowledged as much in his mea culpa, that he was "shocked, shocked" that many people were cheating and distorting the market. I think a view was that derivatives (and short selling, etc) didn't need regulation in and of themselves, but many people, like maybe Rubin, "misunderestimated" the venality of players, and that players needed regulation so that they didn't do self-serving and system-destabilizing foolish things (as they inevitably did).

      Without geometry, life is pointless. And blues harmonica players suck.

      by blindcynic on Sun Apr 18, 2010 at 08:19:32 PM PDT

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