Happy Birthday, Molly Ivins (you were right)

In 1998, the late, brilliant Molly Ivins warned against passage of the Financial Services Modernization Act, predicting that massive financial institutions (like AIG) might take on excessive risk and require taxpayer bailouts:

"Watch the House pass a bad bill. Watch the Senate make it worse. Watch the banking industry dig its own grave. Watch supposedly smart people set up a financial disaster. Can we see President Clinton veto this mess? Veto, Clinton, veto.

"Not since Congress passed the Garn-St. Germain bill in 1981 – the one that deregulated the S&Ls and unleashed a half-a-trillion-dollar disaster, which the taxpayers of this country wound up paying for – has there been a move to match this for pure folly.

"In May, the House passed (by one vote) a bill to eliminate barriers between banks, brokerage firms and insurance companies. This sets up financial holding companies that can offer all three types of services simultaneously. The most obvious risk is that a blunder in the insurance or brokerage end of the business could bring down a bank, putting insured deposits at risk. The taxpayers, of course, then wind up with the tab, as we did with the savings-and-loan mess."