Schumer walks a political tightrope during Wall Street's meltdown
Sen. Charles E. Schumer prides himself on being the senator from Main Street, visiting every upstate county every year, trumpeting every federal grant and diving deep into local issues such as a proposed new Peace Bridge.
But all the while, he also has been the senator from Wall Street, supporting major efforts to deregulate the financial sector while raising millions from securities industry sources not only for his own campaign fund, but for Democratic Senate prospects nationwide.
It's a balancing act that saw Schumer adding community-building provisions to a massive deregulation bill and sounding an early warning about predatory mortgage lending while pushing more deregulation to preserve New York's status as the world's financial capital.
But now, as the American financial system last week faced its gravest crisis since the Great Depression, Schumer faced it, too - along with some criticism that he, along with his congressional colleagues, did not do enough to prevent it.
...
Schumer introduced the first bill to curb predatory mortgage practices a year and a half ago, but by then, home prices were grossly inflated and due for a crash, and another problem lurked behind the scenes.
Through unregulated derivatives called "credit default swaps," American International Group, the insurance giant, insured tens of billions of dollars in mortgage bonds against default. But when those loans went bad, so did AIG - and the government had to rush in with a bailout.
Roper blamed it on this law that Congress passed in 2000 for leaving those credit default swaps and other derivatives without strong regulatory oversight.
"We interconnected the financial services industry in such a way and to a degree that a single player [AIG] has the power the take out the global economy," she said. "How do you let that happen?"
Schumer, on the contrary, blames the Bush administration.
"The [Securities and Exchange Commission] should have done the job," he said. "They had the power to regulate. They didn't."
Obviously, Schumer being from New York is the reason why this article was written. I don't believe he is the sole reason for this. I'm with Schumer on this one. I believe that the Bush Administration and this Republican deregulation mentality is what helped Wall Street crumble.
