No one knows and no one cares, because no one with powr or inflfluence is suggesting that such a thing should happen. These 'progressives' that you refer to (whoever they are) are not in Washington, at any rate. The Democrats that are there, are holding very firmly to a centrist stand, thank you very much.

I'm not interested enough to research the history of banking law, but there is a curious thing going on about Clinton's administration. If the results were good (booming economy), it wasn't Clinton, it was the Rep. Congress that caused it.
If the results were bad, it was Clinton, and the Republicans in Congress had nothing to do with it.
Very convenient, that, and also vey transparently silly..

Although I think the present administration has had a disasterous affect on the nation, and the world, there is one thing we should remember to understand its excesses in favor of profit and growth at any cost.
9/11 did not only kill people, it was also a serious blow to the economy. In the aftermath, bold action was necessary to recoup. The trouble was, that the mentality stayed long after the period of recovery was over. Long after signs emerged of serious trouble, the admnistration was tirelessly preaching how wonderful things were.
A little reality check at one point, several years ago, could have removed any temptation for these nefarious 'progressives' to complain.

The economy is how it's experienced in the land. not what economic theorists dream up in their ivory towers. Theories are there to be tried out. Someone has to loversee their application to watch for misuse, and someone has to look around to see how the're working out.. That not having been the case, we are in our mess now.

If you look at http://books.google.com/books?id=lzys8fDJn3AC&p...
You will see that there was a huge number of causes where Garn- St Germain was just part of one of them. And even then, Garn- ST Germain was passed with overwhelmingly Democratic support.

The Savings and Loan model was unsustainable when in 1980 the short term interest rate was 15% and was higher than the long term interest rate. the model was also unsustainable was money could be invested in more places.

Also, the change in the banking regulation came during the Clinton Admnistration.

The article cited was very partisan and once again, very short on proposed regulations. No one knows what would happen if the government has to approve every loan and every investment but that seems to be the directin that the progressives want. If the left is not careful, they could destroy the mortgage industry in the U.S. because no one will want to invest money in mortgages when the legal liability is going to become too great.

Carter's administration oversaw the relaxing of regulations on what interest rates S&L's could pay, and increased the amount that the gov't insured of their deposits. While there was deregulation in both administrations, the damaging one came during Reagan's. Once again, conservatives seem to be pinning the blame on Carter for things that were not his responsibility.

As economics fashions and politica powers change, they tend to go to the oppostite extreme of whatever preceded.

Markets and businesses are run by human beings, subject to all the human temptations, greed being one those at the forefront. The notion that the markets could self-regulate (competitive greed) is foolish, IMO. There will alsways be those who game the system, go for quick profits, and don't give a hoot for the overall health of a nation's economy or even the global economy.

So. yes. We need to regualte. The question is how to regualte and how much to regulate, as .too much regualtion has its own risks.
From what I can gather, even top economists are struggling to find the right combination. I'm only sure that it must be a delicate balance, not an extreme pendulum swing. to ideological formulas.

S&L's were deregulated in 1980 during the Carter Administration because the S&L model was unsustainable in a high inflation economy (long term low interest debt versus higher interest paying savings accounts). The expansion of mutual funds also made S&L accounts less viable. http://en.wikipedia.org/wiki/Savings_and_Loan_c...

Also, in true activist fashion, the article is extremely long on fingerpointing while skimping on what the proposed regulations would be.