Chapter 13

The 2008 Financial Crisis

How Wall Street's reckless gambling crashed the global economy, how the government bailed out the banks with taxpayer money, and how no one went to prison.

Veritas Worldwide · March 2026 · 2007–2010

The story of the 2008 financial crisis begins not in 2008 but in 1999, when the Glass-Steagall Act was repealed. What followed was the largest transfer of wealth from the public to the private sector in American history.

The story of the 2008 financial crisis begins not in 2008 but in 1999, when the Glass-Steagall Act was repealed. Glass-Steagall, passed in 1933 in direct response to the banking speculation that caused the Great Depression, had for sixty-six years separated commercial banking (taking deposits, making loans) from investment banking (trading securities, underwriting bonds). Its repeal — through the Gramm-Leach-Bliley Act, signed by President Bill Clinton — allowed the largest banks to combine both functions. The architects of the repeal included Robert Rubin, who had been co-chairman of Goldman Sachs before becoming Treasury Secretary, and who joined Citigroup as a senior advisor immediately after leaving the Treasury. [1] The repeal of Glass-Steagall was not the only deregulatory move that enabled the 2008 crisis. In 2000, the Commodity Futures Modernization Act exempted derivatives