Scheer worked for the Los Angeles Times for many years and most recently has written a book entitled “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street” (Nation Books).
Raised in the Bronx, Scheer was a fellow at the Center for Chinese Studies at the University of California at Berkeley, where he did graduate work in economics and knew Arthur Lipow, one of the organizers of ALameda Public Affairs Forum.
Briefly, Scheer described three factors that led to the real-estate meltdown, market crash and other economic malaise of the past few years: namely deregulation of the telecommuications industry and financial sector (via the repeal of the Glass-Steagall Act), as well as welfare reform during President Clinton’s time in office.
Without the repeal of Glass-Steagall, which separated retail and investment banking, the financial institutions in the United States would not have been able to package and sell mortgages as they did over the past 10 years or so, said Scheer.
As people continue to lose there homes, he said, “We’ve accepted the fact that the system enriched a small percent of people while empoverishing many.”
The end of financial deregulation, Scheer explains, came about by the banks arguing that they couldn’t compete globally with such restraints. But President Reagan couldn’t deregulate when they pushed for reforms due to the savings and loan crisis.
Clinton, on the other hand, “was opportunistic … and did a deal with the devil,” the author said.
Another issue that contributed to the crisis was the end of certain laws enforced by the Commodity Futures Trading Commission, which Bay Area attorney and chairperson Brooksley Born unsuccessfully fought to protect during the Clinton years.
This “opened the floodgates,” Scheer said in his remarks.