Happy Anniversary
It was ten years ago today that President Bill Clinton, egged on by one of those former Goldman Sachs honchos who gives himself to public service as Secretary of the Treasury, Robert Rubin, signed the bill that repealed the Glass-Steagull Act — the measure that separated investment and commercial banking. In the 1930s most everyone realized such a separation was needed to prevent destructive market practices that led to terrible economic consequences. By the 1990s most everyone had forgotten this lesson — at least most everyone in Washington.
Now, however, according to news reports, the House may soon have a bill to reinstate and update this Depression-era act. It may well pass in that body, and unless things get a lot better for a lot more people in this country very soon, may even pass the Senate as well next year.
The need here is obvious: to ensure that institutions don’t get too big to fail, so big that U.S. taxpayers must bail them out to prevent the entire system from collapsing. It’s common sense, simple prudence, to take this step. Some EU countries are already in the process of doing so.
Who knows? Perhaps the trough feeders on Wall Street, who will do everything they can to prevent this threat to a small part of their massive undeserved wealth, might not be able to prevent it happening this time around. And wouldn’t that be nice.
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12 Responses to “Happy Anniversary”
That would be very nice indeed. Reregulate. They need it.
I can hear the “less big government more free market” matras and astroturf already. Yes, it's needed, but I'm expecting more of a fight on this than with health care reform.
I'm expecting more of a fight on this than with health care reform.
I doubt it. Keeping companies from becoming too big to extort customers, governments, or taxpayers is obviously essential to free markets.
Yeah… This is one time Clinton dropped the ball (with Congress sharing most of the blame – Barney Frank & Co).
REREGULATE! And if someone in future generations wants to repeal it….slap them in the face with your 401K – HARD.
Wrong again, cartoon breath (in case you're young, that's a Johnny Carson reference). Libertarians (small L) are more for individual freedom, not corporate domination (in other words, we're scared of both corporate and government rule). I don't mind the regulations that work, foster competition, and don't favor one group over another. The libertarian-leaning here have all condemned the corporate lunacy of repealing Glass-Steagall, which I take as further proof that congress is either under lobbyist mind control, or just so proud of how they justify their laws that they never get around to figuring out what they'll actually do.
“matras and astroturf “
AstroTurf from corporations? You've been watching too much TV news. Most the of the AstroTurf comes from the labor unions, which is why they all carry professional pre-printed signs. Corporations cut out the middle man and pay the politicians directly.
I am in the financial services industry and hope they reinstate GS. The repeal was like giving the foxes a key to the chicken coop. Couple that with pushing lenders to virtually give away loans and other funny money products and here we are holding the bag.
That's Glass-Steagall. No Jonathan Livingston there.
Do you really expect ObamaCo to correct the bubble-brained stuff? Look at the Dem legislative and policy record, to date. It includes a managed consolidation of the financial services. Don't be surprised if banks eventually absorb insurance (not limited to health “insurance”) sometime, if this trend continues.
” Libertarians (small L) are more for individual freedom, not corporate domination (in other words, we're scared of both corporate and government rule).”
So true. And it's no surprise we're seeing corporatism (whose meaning is not limited to, and is far from, business corporations, despite what so many ignorant lefties “think”) once more as a solution to all kinds of problems. It is not limited to an increasing government entwinement with large corporations as the model for managing the economy, but also with the “managed cartel” (airlines in the old days, for example), and “government-business partnerships” (and the mentality underlying it, with interventionism that ideally is done involving a few, large “private” parties that control or dominate some element or feature of the economy), the threat of happening next of which is materializing in the desire for private and public agents to “work together” as conceived in next month's economic “summit” now considered.
“The repeal was like giving the foxes a key to the chicken coop.”
The repeal obviously inflated the bubble. A friend of mine agreed with my reaction to it — we are not in the financial industry, but were aware of things, being interested in current and domestic as well as in world affairs. It was the repeal of Glass-Steagall, an obvious bubble-inflating sign, that led me to say I needed to round up investors' money to start a new mutual fund, the Icarus Fund.
Repeal of Glass-Steagall was around the time we saw books like “Dow 35,000,” “Dow 100,000,” “Stocks for the Long Run” (which predictably said that investors in the Third World would buy our stocks when the Baby Boomers sold theirs to finance retirement, as their own nations developed as expected), and when we saw editorials in the Wall Street Journal that included (my friend and I at the time rolled our eyes at this), “Growth Forever.”
And, would the Icarus fund have invested in the Obama campaign if that were possible (same management style)?