Change We've Seen Before

Barack Obama throughout his campaign has repeated the word "change" enough to make one never want to see or here the word again. He seemingly began every speech with the phrase "the last eight years..." while oversimplifying our current economic crisis. In other words: It's all George Bush's fault. I have been trying to figure out if he's a liar, or simply ignorant. I think he might be more of the former and a little of the latter because this crisis has almost nothing to do with Bush. Surely you can blame him for the failure to use his veto pen which resulted in increased spending, however the implosion of the credit system and housing market requires a little deeper explanation.

The present economic meltdown has taken shape not over the past eight years. It has in fact been brewing for the past sixty! The new deal programs of FDR gave birth to the entitlement nation we have today. History shows that once government expands it never reverts back to its original size. Fast forward to the Clinton administration: The Republican controlled congress tinkered with the Community Re-investment act which almost at Gun point forced banks to lend to borrowers of poorer credit quality. In 1999 they proceeded to pass the Graham-Leach-Bliley act which was meant to encourage competition in the banking industry. The law also had another effect: it repealed the depression era Glass-Steagall act which prevented commercial banks from participating in investment banking.

What's interesting about these events is who helped to orchestrate them. Former Secretary of the Treasury Lawrence Summers- who was recently tapped by Obama to join his economic advisory team- helped to craft the Graham- Leach bill. Robert Rubin another Obama economic advisor pushed for its passing and subsequent signing by his then boss, President Bill Clinton. Summers while serving under Rubin as treasury Secretary before taking the top post- joined his boss in defeating a bill to rein in over the counter derivatives in 1998. In 2000, congress passed the Commodity Futures Modernization Act which deregulated financial derivatives like credit default swaps. Many of the large investment bank failures have been spurred by their foray into these instruments that legendary investor Warren Buffet called " Financial weapons of mass destruction. The bill was supported by then Federal Reserve Chairman Allen Greenspan, Rubin and Summers and once again signed by Bill Clinton.

In 1999 Rubin left the treasury to work as an advisor at Citigroup, whose CEO Sanford Weill had pushed for the repeal of Glass-Steagall. This opened the door for Citigroup to become the second-largest seller of ultra risky collateralized debt- obligations which would later contribute to almost $70 billion dollars in writedowns and credit losses from 2007-2008. Rubin profited handsomely during his days at Citi to the tune of $150 million.

Obama stated during the campaign that "The last thing we can afford is four more years of no one in Washington watching anyone on Wall Street". The fact that Summers and Rubin helped to turn Washington into Wall Street is lost on the President. Are we supposed to have confidence in the same cast of characters that created the situation in the first place? Is this his idea of change? Obama has been fooling his spellbound fanatics with empty slogans and Utopian ideas while promising to "fundamentally change America". Unfortunately this change is all too familiar.