NYT: Don’t Forget Shumer’s Role in the Mess

“Since the financial meltdown, people have been asking, ‘Where was Congress? Why didn’t they see this coming? Why didn’t they provide better oversight?’ And the answer for some, including Senator Schumer, is that they were actually too busy pursuing a deregulatory agenda. Their focus was on how we have to lighten up regulation on Wall Street.”

-Barbara Roper, director of investor protection for the Consumer Federation of America

Today’s New York Times has a damning article linking Senator Chuck Schumer to many of the radical deregulatory policies that underlie much of the current crisis.

I have assessed a lot of blame for the crisis on several people — Greenspan at the top of the list, followed by several others, including President Bush. Phil Gramm was a prime sponsor of all manners of ruinous legislation — which, I hasten to add, was signed into law by one President Clinton (he sure isn’t blameless in the mess).

In the Senate, on the other side of the aisle from Gramm was Chuck Schumer. The votes and support noted by the NYT shows Schumer was not much better than Gramm:

“But in building support, he has embraced the industry’s free-market, deregulatory agenda more than almost any other Democrat in Congress, even backing some measures now blamed for contributing to the financial crisis.

Other lawmakers took the lead on efforts like deregulating the complicated financial instruments called derivatives, which are widely seen as catalysts to the crisis.

But Mr. Schumer, a member of the Banking and Finance Committees, repeatedly took other steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees.

He succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent.”

Schumer, nicknamed the jackhammer for his fund raiser technique, apparently drank deeply of the deregulatory Kool-Aid also.

There’s a full table of the legislation he supported here: Schumer’s Stands

Source: A Champion of Wall Street Reaps Benefits ERIC LIPTON and RAYMOND HERNANDEZ NYT, December 13, 2008 http://www.nytimes.com/2008/12/14/business/14schumer.html

Related: Schumer: Cut regulations, make NY more competitive (pdf) Schumer Letter to SEC regarding “Soft Dollars” (pdf) Schumer co-signer on letter regarding derivatives (pdf) Schumer to FDIC on Bank’s Capital Reserve Requirements (pdf) Schumer to SEC on Credit Rating Agencies (pdf) Schumer objecting to Proposed Auditing Rule (pdf)


Originally published at The Big Picture blog and reproduced here with the author’s permission.

2 Responses to "NYT: Don’t Forget Shumer’s Role in the Mess"

  1. Alan Harvey   December 15, 2008 at 9:12 am

    Chuck Schumer was light years ahead of Bernanke and Paulson. He led hearings of the Joint Economic Committee last fall and early this year pointing directly at the problems that were emerging, and wondering why the others had such a happy attitude about things.Very bad job to paint him with the same brush as Phil Gramm or any of the others.The media need to step up to some responsibility, too. It’s not much different than channeling “weapons of mass destruction” to be claiming “no recession” for the first six months of the recession.

  2. Guest   December 15, 2008 at 10:38 am

    Schumer and his holier-than-thou stance – what a joke.