Now we know why Bernie Sanders is so anxious to change the subject to Glass-Steagall when the Wall Street Crash of 2008 comes up. It turn out Mr. Independent Progressive (or is it Progressive Independent?) voted for the 2000 legislation that deregulated derivatives, credit default swaps and other exotic financial instruments that tanked the economy eight years later.
Let’s assume that Sanders never read the background report on the Commodity Futures Modernization Act of 2000. (Yeah, like Hillary Clinton never read the background report on the resolution in support of Dubya’s invasion of Iraq, something that Sanders has repeatedly pounded her on.)
But there it is in black and white, or rather red and blue: Sanders’ vote in the House on the very legislation that greased the skids for banks and other financial institutions to run roughshod without any messy government oversight.
The act was stealthily tucked into a bloated 11,000 page conference report when no one was looking, and passed by a lopsided 377-4 margin during a lame-duck session with a veto-proof majority -- not that it needed one. President Clinton, who had been lobbying behind the scenes in support of the act while publicly harrumphing about the evils of deregulation, signed it into law without batting an eye.
Buried in the act was a yummy provision exempting Enron and other companies from energy trading regulatory oversight.
Not coincidentally, in the years before the energy giant self destructed, it was a generous contributor to Texas Senator Phil Gramm, he of Gramm-Leach-Bliley, and later presidential candidate John MCain’s “financial adviser.” Gramm's wife Wendy was paid over $1 million in salary, stock options, dividends and other goodies from 1993 to 2001 as an Enron board member, but of course was deaf, dumb and blind to the energy company's rampant books cooking with the acquiescence of the late unlamented Arthur Andersen accounting company.
Sanders’ complicity in the passage of the Commodities Futures Modernization Act may help explain his fixation on restoration of the Depression-era Glass-Steagall Act, which barred commercial banks from investing in the very speculative financial deals which contributed significantly to the 2008 meltdown. (President Clinton also supported the Gramm-Leach-Bliley Act, which overturned Glass-Steagall.)
Many of Hillary Clinton’s top donors have, of course, been Too Big to Fail financial institutions, and she has said she would not restore Glass-Steagall, opting instead to better regulate speculators, whatever that means.
Any vote can come back and haunt a politician. But Sanders is not just any politician, which has been a substantial part of his charm and the reason his improbable campaign for the Democratic nomination has had real legs.
(For a detailed look at the Commodities Futures Modernization Act and the mischief it has wrought, check out Paul Blumenthal’s excellent analysis at HuffPo.)