(The following is a Letter to the Editor. BRT will publish such letters so long as they do not contain libellous materials or, in the judgement of BRT, are not profane.)
For It and Then Against It
It’s no use to dwell on the past.
This was a common soundbite as the Great Recession began, especially among Republicans who passed legislation which caused us to end up we are today. But it’s not just the GOP who jumped on the deregulation bandwagon of the 1990s. To find a politician who crossed the aisle at exactly the wrong time, we need look no further than Senator Pat Leahy.
In 1997 Senator Leahy, along with colleagues Tom Harkin and Richard Lugar, co-sponsored an amendment to the Commodity Exchange Act which sought to deregulate the risky derivatives market and declaw the Commodity Futures Trading Commission, a measure which the agency’s chairperson declared would “eliminate federal power to protect against manipulation, fraud, financial instability and other dangers.”
In 1999 Senator Leahy voted in favor of the Gramm-Leach-Bliley Act, which did away with crucial financial regulations separating commercial banking from speculative investment, including much of the Banking Act of 1933. This Act has been cited by renowned economists, including Paul Krugman and Joseph Stiglitz, as having helped to cause the recession.
In 2000 Senator Leahy voted to approve the Commodity Futures Modernization Act as part of an appropriations bill, successfully deregulating derivatives and facilitating credit-default swaps. Both of these exotic financial tools contributed to the collapse of the American banking industry.
Fast-forward to 2010, with the financial reform bill being negotiated in a Senate conference committee, Senator Leahy the most senior member of the panel. During the proceedings, Leahy stated that he wished to “finally bring the $600 trillion derivatives market out of the dark and into the light of day.”
I am deeply grateful for the thirty-six years Senator Leahy has dedicated toward representing Vermont and the tremendous work he has done in service of this state. However, I am curious to hear how he would defend the positions he took as Congress tore down the walls of the American financial industry, votes whose repercussions will be felt across the state for years to come. I urge my fellow citizens to ask the same tough question, and for Senator Leahy to participate in an open, public, televised debate with other Senatorial candidates––so that we can reflect on past mistakes so they have a lesser chance of being repeated.
Lane Kisonak,
South Burlington, VT
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