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Sachs honchos who gives himself to public service as Secretary of the Treasury, Robert Rubin, signed the bill that repealed the Glass-Steagull Act — the measure that separated investment and commercial banking.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.