Hillary attempts to bolster her detail-lite plan to rein in Wall Street with this assertion in her Times OpEd:



First, Glass-Steagall was not a “rule.” It was the most powerful financial legislation ever passed by the U.S. Congress in 1933 and it protected the nation from another 1929 style crash for almost seven decades. Just nine years after its repeal, Wall Street crashed and caused the greatest economic upheaval since the Great Depression.

What Hillary isn’t telling you about AIG, the giant insurance company which blew up in 2008 from selling credit derivatives to Wall Street firms and received a massive taxpayer bailout, is that it was also Bill Clinton’s administration that allowed AIG to become a derivatives powder keg by also passing and signing into law the Commodity Futures Modernization Act in the waning days of his administration. This act removed these dangerous derivatives from regulatory oversight. Additionally, the legislation that Bill Clinton signed into law that repealed the Glass-Steagall Act, the Gramm-Leach-Bliley Act, also repealed the sections of the Bank Holding Company Act of 1956 that had separated commercial banking from insurance.

At the time AIG blew up in 2008, it was a global insurance company peddling billions in insurance annuities to moms and pops around the globe; it owned the FDIC insured AIG Federal Savings Bank. AIG also owned 71 U.S.-based insurance entities and 176 other financial services companies throughout the world, including AIG Financial Products which blew up the company. None of this could have happened without the deregulation that occurred in the Bill Clinton administration.

As for Lehman Brothers, Hillary doesn’t mention that at the time it blew up, Lehman Brothers owned two FDIC insured banks, Lehman Brothers Bank, FSB and Lehman Brothers Commercial Bank. Together, they held $17.2 billion in assets as of June 30, 2008. Lehman Brothers Bank FSB is where Lehman handled its mortgage loan originations. When the FDIC approved the Lehman Brothers Commercial Bank application in 2005, it specifically noted that the FDIC insured bank “anticipates acting as a derivatives intermediary, engaged in matched trading of interest rate products, primarily interest rate swaps, as well as forward purchase agreements and options contracts.” None of this would have been possible without Bill Clinton’s deregulation of Wall Street.
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Massive amounts of Wall Street money bought the repeal of the Glass-Steagall Act and that money is now gushing into Hillary’s campaign to make sure that Glass-Steagall remains gutted. Robert Rubin, Bill Clinton’s Treasury Secretary who pressed for the repeal and then quickly moved to its main beneficiary, Citigroup, to collect over $126 million in compensation over the next decade, while also being on hand to watch the banking behemoth collapse into the arms of the taxpayer from toxic derivative bets, is now a player in Hillary’s bid for the White House.