Power, Lost and Found: America At Century’s End 545however, the biggest economic powers, like the U.S., controlled the WTO and
NAFTA and established rules–like prohibiting protective tariffs or state subsi-
dies for businesses— that made it nearly impossible for smaller countries to
gain economic independence. The U.S. could then go into other lands and
establish factories or other businesses and pay incredibly low pay–over half the
globe made less than two dollars a day–and not have the same kind of wage
and workplace laws to follow because the WTO and NAFTA had eliminated
those kinds of regulations. This process was termed globalization because the
countries of the globe were interconnected in these organizations and their
own state laws, and in fact their own sovereignty, were secondary to the needs
of global Capitalism, and the U.S. would have dominance in that area.
At home, Clinton’s economic policies also helped the biggest corporations.
By the late 1990s, the stock market was surging and large banks were merging
with and swallowing up smaller banks. There was also a huge increase in
banks having branches outside the U.S., so Wall Street and its many friends
in Congress wanted to eliminate the regulations that had been intended to
protect investors and stabilize the financial system. Hence the Gramm-Leach-
Bliley Act of 1999 repealed key parts New Deal banking laws, particularly
Glass-Steagall [see Chapter 4] and allowed commercial and investment banks
to merge, to offer home mortgage loans, sell securities and stocks, and offer
insurance. As Clinton saw it, getting rid of New Deal banking laws was simply
an act of “modernization.” As one of his aides explained, “The argument for
reform is that the separation between banking and other financial services
mandated by Glass-Steagall is out of date in a world where banks, securities
firms and insurance companies offer similar products and where firms outside
the US do not face such restrictions.” The repeal of Glass-Steagall and other
new financial laws set off a financial bazaar. Giant brokerages like Goldman
Sachs, whose directors Robert Rubin and Henry Paulson became Secretaries
of the Treasury under Clinton, and Citigroup began to gobble up investment
houses like Smith Barney, Paine Webber, Salomon Brothers, Merrill Lynch,
and others. In addition to pushing through the repeal of Glass-Steagall,
Clinton also signed the Commodities Future Modernization Act, which dereg-
ulated the complex financial system of derivatives, a form of speculation
involving commodities, stocks, bonds, interest rates, and currencies.
Clinton even reappointed Reagan’s head of the Fed, Alan Greenspan, a
friend and follower of the free-market novelist Ayn Rand who was a cheer-