Editor's note: This contribution by the late journalist I.F. Stone first appeared in our January 1975 magazine.
So Sandy Weill, former head of Citigroup, woke up one morning this week to the epiphany that the banks are too big to fail and should be chopped up. Well, that’s not exactly cause for bestowing an honor on the guy.
After all, he was the chief architect of too big to fail.
He was the prime mover behind destroying Glass-Steagall, the New Deal law that built a wall between commercial banking and investment banking.
Now he wants that wall rebuilt?
Well, thanks a lot, Sandy, but you already destroyed the economy with your greedy power play when you ran Wall Street and bullied the Clinton crowd into foolish deregulation.
And you were paid handsomely by Citigroup for your dirty work.
Now you say you’re sorry.
You’re like the pyro who sets wildfires and then apologizes later.
It just doesn’t cut it.
Nor does the oh-so-tardy apology from The New York Times. Finally, this morning, it acknowledged that it was wrong to editorialize for the tearing down of Glass-Steagall in the late 1980s and 1990s.
“Having seen the results of this sweeping deregulation, we now think we were wrong to have supported it,” the Times said in an editorial entitled, “The Big Banker’s Change of Heart.”
And note how it tried to excuse itself by saying that its view at the time was conventional wisdom. As if that’s an excuse!
“Some expressed alarm about having banks, driven by huge profits and huge bonuses, bet the money of their depositors on new, opaque and increasingly risky investment instruments,” the Times wrote. “But the idea that the industry did better without regulation was entrenched in the political debate, not only on the right, but across the political aisle and into the higher reaches of the Clinton Administration.”
Come on now.
Many consumer advocates, like Ralph Nader, and wise economists, like Dean Baker and John Kenneth Galbraith and his son James Galbraith, were pointing out the insanity of tearing down Glass-Steagall. Just because some corporate Democrats, including those in the Clinton White House, supported the idea didn’t make it any more worthy. And the claim that the idea “was entrenched in the political debate” (Passive Alert!) raises the question: Who entrenched it there? And didn’t the mighty New York Times have the ability to get it out of the trench? In actual fact, it was the New York Times that helped put it in the trench.
Sometimes saying you’re sorry is worse than saying nothing at all.
If you liked this story by Matthew Rothschild, the editor of The Progressive magazine, check out his story “Bernie Sanders Calls Out Obama on Social Security."
Follow Matthew Rothschild @mattrothschild on Twitter