Wednesday, April 28, 2010

Clinton Blames Nixon's Dropping the Gold Standard, Not His Repeal of Glass-Steagall

Bob Schieffer interviewed President Bill Clinton at the Peter G. Peterson Foundation's Fiscal Summit. During Clinton's rambling answer to a question about the SEC's civil suit against Goldman Sachs, Bill said:

I think there's a bigger problem here. Too much of our growth in the last decade was in finance. And ever since we went off the gold standard, which was necessary for economic management purposes. If you look at it, we had a global financial economy before we had a global trade economy, and certainly before we had any global environmental and labor safeguards. Ever since then economic inequality has increased.

In a shameless, face saving move, Bill blamed huge speculative growth in the financial sector the last decade on President Nixon (R), who cut the final gold-dollar tie in 1971. Clinton failed to mention his 1999 signing of Graham-Leech-Bliley, which repealed Glass-Steagall protections, opening the floodgate for Wall Street excesses.

The clip showed Pete Peterson in the audience, the founder of the Institute bearing his name. Peterson made his billions from The Blackstone Group, a private equity underwriter (PEU). Clinton has his own PEU ties, as do many ex-politicians. PEU's epitomize global greed. They've hung on their preferred carried interest taxation due to the largess of both political parties.

Global finance brought junk products and a near meltdown of the financial system. Bill Clinton doesn't want to walk back globalism, he wants the slower parts to catch up. That's why Glass-Steagall won't comeback. It's why private equity and sovereign wealth funds get a free pass under financial reform. Global finance could care less about global inequality. They chase the have's, not the have not's.

America witnessed the campaign style kickoff of Obama's deficit commission, financed in part by the Peter G. Peterson Foundation. PEU Peterson wants lower taxes and cuts in entitlement spending, while Bill Clinton's predilections towards privates is well known. Even "bubble blower" Alan Greenspan made an appearance.

The gun sounded on the Deficit Commission. Let the conflicts of interest begin!

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