Here’s the YouTube video of Nancy Pelosi ranting in Congress before putting to vote the unpopular $700B bailout of Wall Street. Instead of rallying both parties who must vote against the tide of opinion from their constituencies, and risking their political future in November, she squanders the political capital gained in the frantic bi-partisan effort in putting together the bill by delivering this incendiary and divisive speech.

$700 billion. A staggering number. But only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness. When President Bush took office, he inherited President Clinton’s surpluses—four years in a row, budget surpluses, on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within two years, he had turned that around.

And now eight years later, the foundation of that fiscal irresponsibility, combined with an anything goes economic policy, has taken us to where we are today. They claim to be free market advocates, when it’s really an anything goes mentality. No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute, and the taxpayer will bail you out.

Those days are over. The party is over in that respect. Democrats believe in a free market. We know that it can create jobs, it can create wealth, it can create many good things in our economy. But in this case, in its unbridled form, as encouraged, supported, by the Republicans—some in the Republican Party, not all—it has created not jobs, not capital, it has created chaos. (from Transcript of Speaker Pelosi’s Speech, The NY Times, 29 Sep 2008)

Such utter lack of leadership and disconnect from the American public!

By the way, I did a little Wikipedia research on when and how this “anything goes economic policy” started, i.e. the deregulation of the banking industry that lead to the “irrational exuberance” with mortgage-backed securities two years ago and landed the US in this mess. It turns out that it was two decades in the making, with the financial sector led by Citigroup (then Citicorp) spending $200M in lobby money to repeal legislation put in place after the Great Depression precisely to prevent such a financial catastrophe from happening again. This was the Glass-Steagall Act that separated the activities of commercial and investment banks, with the irony now being that the repeal also allowed Bank of America to acquire and thus save Merrill Lynch.

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bipartisan bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. Without forcing a veto vote, this bipartisan, veto proof legislation was signed into law by President Bill Clinton on November 12, 1999.

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.

The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the “finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics…” These industries succeeded in their two decades long effort to repeal the act. (from Glass-Steagall Act, Wikipedia)

So the bill was lobbied by the banking industry, introduced by Republican lawmakers, and voted on by a Democratic Congress and President! “And how did it sneak up on us? So silently, almost on little cat feet[?]” Awww, come on. Nancy Pelosi voted for the Gramm-Leach-Bliley Act that repealed Glass-Steagall Act.

I think a music video by Cabaret Voltaire is called for at this point. It’s called Nag, Nag, Nag.

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