Clinton's direct quote said: “On derivatives, yeah I think they were wrong and I think I was wrong to take [their advice] because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don’t need any extra protection, and any extra transparency." He went on to say: “And the flaw in that argument was that first of all sometimes people with a lot of money make stupid decisions and make it without transparency.”
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Bill Clinton went on to say he was also wrong about understanding the consequences if the derivatives market tanked. He said: “The most important flaw was even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect 100 percent of the investments, and indeed 100 percent of the citizens in countries, not the investors, and I was wrong about that.”
The unspoken undercurrent of President Clinton's comment is the significant amount of influence a sitting Treasury Secretary has over the policy decisions of a President and ultimately over the citizens of the country. If Rubin and Summers were essentially calling the shots on extremely sensitive and volatile economic issues, with embedded long-term ramifications, that we are now suffering from, and the President was accepting these suggestions because he didn't know the full ramifications of these measures himself, one has to ask: What kind of control is our current Treasury Secretary, Tim Geithner, exerting over President Obama? How much control did Hank Paulson exert over President Bush? Whose interests were (and are) they serving? The people's interests or Wall Street's interests? The answer is painfully clear.
By Clinton's own admission, 1% of the investing community caused the problems that affected 100% of investments, citizens and countries. Something is terribly wrong with this picture and these priorities. But I guess ignorance is bliss and alleged ignorance is still tolerated by Congress as plausible deniability. Robert Rubin, Clinton's former Treasury Secretary testified earlier this month that he did not recall knowing before September 2007 that Citigroup, for which he was a highly paid senior advisor, that the bank had held onto investments composed of repackaged mortgage bonds. He claims he learned belatedly that Citigroup had $43 billion in high risk securities on its book. Yeah, right.
The climate of corruption continues. 1% of the investing community has destroyed the financial fabric of this country. 1% of the investing community has leveraged and gutted cities, counties, states and entire countries. 1% of the investing community has terrorized the lives, savings and futures of countless citizens. Lives have been stolen because most individuals cannot reclaim the 20, 30 or 40 years of work that have been ripped away from them in less than two short years. Yet that 1% of the investing community is where most of the bailouts, guarantees and secret infusion of funds have been channeled.
More and more people are becoming educated about the financial system. More and more people are waking up to the assault of which they have been a victim. More and more people are changing their ways and refusing to re-enter a debt-based monetary system. Try as they may, the Geithners, Summers and Bernankes of this world will fail in their attempt to entice enough people to re-enter the world of debt. Change is coming, but it will be far different from any kind of change that was imagined during the last election.
As a footnote, after Clinton's interview, Clinton Counselor Doug Band wrote to the show and said that "during the interview, reflecting on a derivatives debate that occurred twelve years ago, President Clinton inadvertently conflated an analysis he received on a specific derivatives proposal with then-Federal Reserve Chairman Alan Greenspan's arguments against any regulation of derivatives."
I'll leave that one for you to figure out but it sounds very reminiscent of: "I smoked, but I didn't inhale". I guess leopards really don't change their spots. Even after 12 years.
