The $700 billion calamity that looms over what was once our government was a long time coming. It stemmed from chromosomal Republican hatred for the New Deal, and this bile triumphed when corrupted Democrats bought into it.
Among the ironies of the last few weeks is Wall Street's crowing that America is facing the worst economic meltdown since the Great Depression. The reforms, the regulations that sprung from it, are what these same voices principally hate.
President Franklin D. Roosevelt and Democratic Congresses passed regulations blocking industrial and railroad monopolies, stiffening food safety and -- most important to this crisis -- discouraging national and international financial combines and secrecy.
The Carter administration betrayed the first signals that Democrats were uncomfortable with the New Deal. Carter's chief financial adviser, Alfred Kahn, economics chairman at Cornell University, began complaining about federal "rigidities." Kahn wanted to free up the airlines. But he also frowned on "rigidities" in FDR's labor laws, which gave workers the right to organize and bargain for pay and benefits.
Republican President Ronald Reagan became president via Carter's stagflation and the hostage standoff in Iran. But Reagan transformed his lucky win into a mandate, undeclared in his campaign, to attack all federal regulatory agencies, including the ones safeguarding our investments.
But Democrats still controlled the House under Reagan. So banking money transformed them into new Democrats. These House members abandoned in the 1980s the post-Watergate, post-Abscam custom of avoiding taking campaign cash from special interests for which they had a specific watchdog responsibility.
Then-Rep. Stan Lundine, D-Jamestown, a member of the Banking Committee, strongly disapproved of taking money from those he was supposed to scrutinize. But Lundine was the exception. Almost every other Democrat on the panel had his hand out to banks and investment houses for campaign money, overseas junkets, fat speaking fees and gifts.
This is how the Reagan-era savings and loan crisis came to be. Under Republican President George H.W. Bush, a bipartisan Congress repealed much of FDR's bank regulation. National mega-banks were born.
Then came President Bill Clinton, the most modern of the new Democrats. In 1994, he bragged, "we have deregulated banking." Not quite. FDR's Glass-Steagall Act was still in the way. In 1996, Clinton declared: "The era of big government is over."
Glass-Steagall, a 1933 remnant of FDR's "big government," made it difficult for banks and insurance companies to use depositors' money or premiums for investment purposes. Wanting to clear the way, Clinton's treasury secretary, Robert Rubin, lobbied for repeal.
Rubin is now advising Sen. Barack Obama of Illinois, the Democratic presidential candidate. The sponsor of the 1999 repeal, then Sen. Phil Gramm of Texas, is counseling Sen. John McCain of Arizona, the GOP candidate, on economics.
Clinton gaily signed Gramm's repealer, which unleashed on the unsuspecting investor all of the sophisticated, indecipherable financial instruments on which a few profited handsomely.
These, of course, included the worthless mortgages that these international post-Steagall investment houses inserted like jelly into a roll, mashed together into larger jelly rolls and sold here and abroad.
These are the instruments that the taxpayers are now called on to buy. Nobody understands how -- least of all members of the House and Senate, or the Bush administration.
Undoubtedly they will turn to some of the 37,000 lobbyists who prowl the capital -- double the host in 2000 -- for advice. In secret.