The Reagan-Era Garn-St. Germain Depository Institutions Act

I have just been reading about that act, and the financial fraud it led to, in Rodney Stich's book "Defrauding America". The book is about much more than that, but it's a big book and I had just gotten to that section. So it's kind of funny that Paul Krugman writes about Garn-St. Germain in his column today.

The joke is how Reagan introduces the bill when he signs it:

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.”

This is the same quote Stich had in his book too, and is basically a sick joke-- unless Reagan means the financial criminals hit the jackpot.

Krugman makes a case that many of the problems in the deregulated financial industry started with that one bill, and Stich puts it into more of a continuity of criminal fraudulent activity in the US, starting (from his perspective) with fraud relating to air disasters.

Of course, one can stretch major high-level criminal activity back even further, through world wars, the establishment of the Federal Reserve banking system, etc. Ultimately it all comes down to the evil nature of the Powers That Be and what we can possibly do to fight back.