1) The swaps insertiion that Gramm made around the same time as the Glass-Steagle repeal (but in a different bill as I recall) played a much more important and immediate enabling role in the present crisis than did the G-S repeal itself; you could say that the swaps measure tipped the potential crisis, based on what was already occuring, from the scale of a mere repeat of the 1980s-90s crisis to the far more dangerous scale that is only now becoming evident in this one. Some hints to both parts of this point can be found in Muolo & Padilla’s Chain of Blame, which so far is the journalistic standard on the history of the subject, and also in Morris’s Trillion Dollar Meltdown. A debate proposition for those long winter nights upcoming: “That the Glass-Steagall repeal act was intended mainly as a cover for the commodities deregulation from which both European (e.g. UBS) and American investment bankers made enormous fee income.”

2) Bipartisan? Boy Howdy!! But a broader view of the last twenty-odd years of politico-finance is needed, or you’ll never see it.

and now obama has chosen, for his main economic advisor, a rubin guy. how does this not matter?

i’m only advocating that we try to look dispassionately at the facts.

But Clinton is not one of the major economic advisers to Senator McCain, and being pushed as a potential Secretary of the Treasury under McCain while Gramm is.

And since Clinton was having to make compromises with Republican controlled Congress to get ANYTHING progressive passed, the blame has to lean to the Congress on this.

As always, YMMV.

White House Is Joining in Efforts To Loosen the Limits on Banking

By KEITH BRADSHER,
Published: February 27, 1995

The Clinton Administration plans to call this week for legislation that would allow commercial banks, securities firms and insurance companies to merge, forming giant financial services companies that would offer everything from checking accounts to mutual funds and life insurance, Federal officials say.

In a speech prepared for delivery in New York on Monday and in Congressional testimony scheduled for Wednesday, Treasury Secretary Robert E. Rubin will urge Congress to repeal the Depression-era Glass-Steagall Act, the officials said.

that would be the same rubin mentioned here:

Union Critical of Obama’s Top Economics Aide

By LOUIS UCHITELLE
Published: June 12, 2008

Acting quickly after securing his party’s presidential nomination, Barack Obama picked a well-known representative of Bill Clinton’s economic policies as his economic policy director and signaled this week that the major players from the Clinton economics team were now in his camp — starting with Robert E. Rubin.

Senator Obama, Democrat of Illinois, hired Jason Furman, a Harvard-trained economist closely associated with Mr. Rubin, a Wall Street insider who served as President Clinton’s Treasury secretary. Labor union leaders criticized the move, and said that “Rubinomics” focused too much on corporate America and not enough on workers.

the deregulation we’re rightly condemning – happened during the clinton administration and with clinton’s signature on it. this is not just a problem with one of the parties.

Phil Gramm is a one man wrecking crew for the economy.

In addition to helping to cook up the sub-prime mortgage mess, he oversaw the end of Glass- Stegall which wisely separated investment houses, banks and insurance companies.

Throw in his role in enabling Enron to game the energy markets (just ask California about that), and he’s a toxic brew that should be kept as far away from our economy as humanly possible.

Instead, he’s got a 50/50 chance of becoming our next secy of the treasury. Horrors.

Note: We stream live at 12 eastern with Bugliosi.

Now the point here is that the money I might end up owing you isn’t fixed. So there isn’t a way to demand that I have the money to cover my potential liability because neither of us know what that is. But a regulator can set up rule of thumb mechanisms. He/she can say there are absolute limits to how many of these you can hold. And maybe you need too set aside reserves to cover a potential percent loss. They can also modify the terms of the derivative contracts. And again transparency, transparency, transparency.