"The Committee to [Screw] the World"

In 1999, Alan Greenspan (Chairman of the Federal Reserve), Robert Rubin (Treasury Secretary for the Clinton Administration) and Lawrence Summers (Rubin's deputy secretary) were dubbed on Time Magazine's front cover as "The Committee to Save the World". Ironically, just a year before that, the trio made a decision that should have earned them the moniker "The Committee to SCREW the World"

In 1998, Brooksley Born, chairwoman of the Commodity Futures Trading Commission, began to notice the rise of a new economic instrument called the "derivative". A derivative is "a financial instrument which derives its value from the value of underlying entities".  Noticing their complexity and thus the greater likelihood that they could be used for high speculation and fraud, Born determined that her CFTC would begin regulating the use of derivatives.
Before the end of that day, Greenspan, Rubin and Arthur Levitt, then-chairman of the Securities and Exchange Commission, put out a statement saying they had “grave concerns about this action and its possible consequences” and they “seriously question the scope of the CFTC’s jurisdiction in this area.”
Greenspan, Summers, Levitt and Born testified at a congressional hearing in July of that year, with the three men warning that the CFTC proposal could hurt financial markets and put the legality of existing derivatives contracts in doubt.
In 2000, Congress passed the Commodity Futures Modernization Act.  In the new law, derivatives were specifically prohibited from being regulated.  This mistake was a major contributor to the 2008 crash of the US and world economies.

Bloomberg writes that
The global OTC derivatives market mushroomed to a notional value of almost $600 trillion in 2007 from about $28 trillion at the time of Born’s proposal. [this ballooning of derivatives] include[d] the toxic instruments that ravaged AIG and Lehman Brothers. Those decisions helped set the stage for the worst global recession since World War II, with aftershocks that are still being felt from Washington to Athens.
We're still feeling it. We got screwed. And none of the Committee to Screw the World ever went to jail.


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