During the Bush 41 administration (the Father, not the son -- and let's not forget the OTHER son of George H.W. Bush who helped loot an S&L, a bipartisan sport during the second Reagan administration), it was argued that the Depression era laws regulating the financial industry that put up firewalls between commercial banking, investment banking (stock brokerage) & insurance, and related laws that strictly limited interstate banking and financial institution mergers had to be repealed as American banks had to become "bigger" to compete with the larger Japanese banks.
(Remember when Japan was our economic "foe", much like China is portrayed now.)
It wasn't until the GOP took back the House and implemented Newt Gingrich's "Contract on America" that this legislative agenda was put into law. (And granted, it had bipartisan support despite the warnings that it would lead to disaster, and the laws were signed by Bill Clinton, including laws on "hedging" that once again introduced destabilizing "speculation" into the financial sector, the bugaboo that had been blamed for the Great Depression.)
The irony was, by the time these laws were being enacted, the huge Japanese banks had proven themselves to be inefficient dinosaurs, unable to react nimbly to changing market conditions due to their size, and were in severe trouble. (Remember -- it was SIZE that was the argument for those arguing against financial industry regulation staring with Bush 41. The mantra was American banks had to get BIG to compete with Japanese banks in a global market.)
During the Clinton Administration, the huge Japanese banks dragged Japan into a DEPRESSION (not a recession, as there was negative growth) for a decade -- this was going on at the very same time these laws were being enacted by the Republican Congress, and signed off on Bill Clinton, who never met a campaign contributor he didn't like. Thus, the "reason" for the repeal of New Deal regulatory legislation, that U.S. banks had to become BIGGER to compete internationally with the huge Japanese banks, was false.
Bigness in banks was proven to be dysfunctional, a destabilizing factor that had brought about economic disaster in Japan.
Then why did this come about then? Then again, why did the U.S. continue with the deregulation of the electric utility industry after deregulation in Ontario an Alberta proved so disastrous? When it was shown that small business and individuals were getting shafted in favor of BIG businesses, and causing economic dislocations that helped trigger a recession?
When electric utility deregulation first came to California, it had the exact same disastrous effects.
(Hey people. the FDR & Truman ideal that regular folks and small businesses are the bedrock of stable economic growth is true!)
Were foreign examples ignored because to your average American, nothing exists beyond the borders of the U.S.A.? That the examples of other countries -- even "U.S.A., Jr.", Canada -- don't count as America is so unique? That America is exceptional.
(Yeah, it's SO different than Canada, isn't it? Well, Canada does have a better social safety net and economists who predicted that because of that safety net and tighter regulation, it would better survive the original global recession that started during the first year of Bush 43's reign were right, and it is doing better than the U.S. and the European countries that adopted the "anglo-saxon model" of laissez-faire capitalism during this downturn, too.)
To put it bluntly, do Americans ignore the examples of other countries as we are so ignorant about the rest of the world, even countries on our border? Or is because the lobbyists had bought Congress, Republican and Democrat alike, and had Bill Clinton in their pocket, too?
But remember: It was the GOP under Newt Gingrich that made this nightmare a reality. When people say it was all unexpected -- what a laugh! It was all forecasted.
"Progress, far from consisting in change, depends on retentiveness. Those who cannot remember the past are condemned to repeat it." -- George Santayana
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