James Baker to David Gregory: Financial Deregulation Happened on Clinton's Watch Not Reagan's

February 6th, 2011 5:47 PM

Former Reagan Chief of Staff James Baker on Sunday took issue with having the 40th President blamed for financial deregulation.

When "Meet the Press" host David Gregory brought this up at the end of his program, Baker replied, "[The deregulation of the financial industry didn't occur on Ronald Reagan's watch, it occurred for the most part, I think, on Bill Clinton's watch" (video follows with transcript and commentary):

DAVID GREGORY, HOST: This was, Willie Brown, former mayor, former speaker of the Assembly in California, the cover of Time magazine recently that shows Ronald Reagan and Obama's admiration for him, "Why Obama loves Reagan." Is this aspirational? Is this a president after a tough midterm election who simply wants to match the electoral success of Reagan? Or is there something more?

WILLIE BROWN, FORMER MAYOR SAN FRANCISCO: No, no, no. In reality, Barak Obama has always been, in his political life, an admirer of Ronald Reagan. Many of the qualities that he exhibits are reflective of what Ronald Reagan was really all about. He has not been able, frankly, to demonstrate those in the first 18 months or so of his administration simply because he had such an awesome majority in the Senate and an awesome majority in the House, and that majority was dominated by the more progressive wing of the Democratic Party, far beyond what Obama really is. Obama is more like Reagan than he is like anyone else, probably including Bill Clinton, believe it or not. And he is therefore a real admirer, and it's genuine.

MR. GREGORY: Secretary Baker, is it also important to learn from some of President Reagan's failings? Did deregulation, its impact on the economy, did deregulation of the financial industry have a negative effect, running up huge budget deficits?

JAMES BAKER, FORMER REAGAN CHIEF OF STAFF: Well, let me just, let me just suggest to you that the deregulation of the financial industry didn't occur on Ronald Reagan's watch, it occurred for the most part, I think, on Bill Clinton's watch.

To be sure, the Garn-St. Germain Depository Institutions Act of 1982 - which deregulated savings & loans and eventually led to the S&L crisis - was signed by Reagan.

However, as NewsBusters has regularly reported since the financial collapse of 2008, the pieces of legislation directly responsible were the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 both signed by Bill Clinton.

As these bills deregulated banks, brokerage firms, insurance companies, and commodities, they were far more comprehensive and impactful than anything Reagan did concerning the financial services industry.

Given Obama and his media minions having told us for years that the recession we all just went through was the worst since the Great Depression, one has to side with Baker on this one:

BAKER: But, but, sure, any leader should learn from the experiences of the past and of, and of other leaders. But I might not, not agree with Willie. It...

MR. GREGORY: You don't buy the Obama/Reagan nexus?

MR. BAKER: No, I don't buy it. And here's why. President Obama made a fundamental mistake, in my view, when he subcontracted out the formulation of his domestic policies to the, to the most liberal elements in his party up on the Hill. That prevented him from then being able to go moderate Republicans up on the Hill and say, "Hey, what kind of change do you need in, in my bill?" If he'd sent his own bill up there, "Let me tweak the bill a little and you can go back to your district or your state and say, `Look what I got in the president's bill.'" That's what President Reagan did in the first term...


MR. BAKER: ...to get support from House Democrats.

Now watch as Gregory and Mitchell make one more attempt to turn Obama into Reagan:

MR. GREGORY: Andrea, just about 15 seconds here. But he--the president, in his State of the Union, talked about doing big things. That was Reaganesque.

ANDREA MITCHELL, NBC: That was, and he was trying to project this optimism and, and generosity of spirit. And also, coming after Tucson, we saw so memorably--Peggy wrote the speeches that really gripped our hearts--the way Ronald Reagan was comforter in chief, not only commander in chief. And that sensibility was something that I think Barack Obama identified with.

MR. GREGORY: All right. We are going to leave the discussion there. Thank you all very much.

Exit question: are you sick and tired of seeing so-called journalists equate the most liberal president in American history to the most conservative president of our lifetime?