No clean hands in the recession
July 8, 2011
I regards to Melanie Sturm’s latest op-ed, Think Again (“The last best hope of Earth,” July 7, 2011, The Aspen Times): Melanie is half right but also seems half confused. The government intervened by way of two acts: 1) Graham-Leech-Bliley and 2) The Commodity Futures Modernization Act. One passed the Senate 90-8. The other was passed unanimously without debate!
These acts created an environment “free” of the regulations that “so stymied” the business community from making the “free market” work from 1935 until 2000. No recession during that period was as vast or debilitating as the current one and the reason is crystal clear: Undoing the Glass Steagall Act and unleashing the derivative and CDs markets. Walsh’s comment is from the fox in the proverbial hen house.
Once there is a realization that the financial crisis was borne out of bi-partisan efforts fueled by special interests that have no political loyalties, we may begin to right the ship; however, at the moment, neither party is moving toward this realization.