Overweening Generalist

Sunday, October 30, 2011

Reinstall Glass-Steagall

Among the many reforms made by FDR in the desperate attempt to assuage the suffering of the Great Depression was what's commonly called the Glass-Steagall Act, which was germinated in 1933 and went into effect in 1934. Probably the major cause of the Crash was rampant speculation, and Glass-Steagall put into effect the FDIC and separated the commercial banking operations and the securities biz.

And, when the dust cleared after WWII it worked pretty well, until 1999.

In listening to the brain trusts (this is a diffuse network, but I define them as the ones who, when you wander around an Occupy site, are mentally equipped to explain in depth what's needed to happen to revive the world economy, if not the Unistat economy, for example, see the video at the end of this post), you will hear calls to repeal the Gramm-Leach-Bliley Act, or the "Financial Modernization Act". What was that? Isn't "modernization" good? (Yet another way words hypnotize us. Or are supposed to hypnotize us.)

It was the move sponsored by three Republicans to effectively get rid of Glass-Steagall. If you listen to this partisan d-bag (Max Keiser, first couple minutes), his assholic simple-minded message is that the Democrats deserve most of the blame and caused the problems actuated by the demise of Glass-Steagall. True, it was repealed under Clinton, but let's not pretend the three guys whose names are on the bill were not Republicans! Just who was supposed to be the targeted audience of dipshit Keiser's tired old line that the Republicans are the adults who understand money and the Democrats don't? This is really offensive, and I'm calling this asshole out, right here. Gramm (R-Texas). Leach (R-Iowa). Bliley (R-Virginia). Then the Hillbilly With a Perpetual Hard-on (D-Arkansas) signed it into law. There's plenty of bought-off blame to go around. We want to fix the problems, alleviate the sufferings and injustices and level the playing fields.

Oh yea: Check out North Dakota Democrat Byron "The Seer" Dorgan (3 mins):

Sidebar Here: What is it about North Dakota and their stark, staring SANE banking practices? HERE's a 2009 article from Mother Jones that lends some decent insight.

Dorgan (U.S. Senate, 1992-2011) deserves more credit for his fiscal responsibility.
On the other hand, the "Gramm" in the Gramm-Leach-Bliley Act that got rid of Glass-Steagall? That's one Phil Gramm, a U.S. Senator from Texas from 1985-2002. A Texas Republican "economist" who became a politician. Hey, what could go wrong there?

He made Time mag's "25 People To Blame For The Financial Crisis." Another, more nuanced analysis of Gramm's yeoman work for the 1% is HERE.

Righteously rubbing yet more salt into Gramm's deservedly tarnished cred, see #4 on THIS LIST of the 10 worst capitalists who helped bring on the economic collapse of 2008.
During the S&L debacle of the late 1980s, early 1990s, possibly the one thing that kept that mess from being far worse was the Glass-Steagall laws, which were still in place. The idea that, less than ten years later no lessons were learned and the law was gutted, should be something culturally memorable, aye?
This idea - gaining a lot of traction in Occupy encampments - of repealing Gramm-Leach-Bliley and reinstating Glass-Steagall is something more tangible (than "Make The Banksters Pay!") that can be done. It's possible, ladies and germs!

Sorry to point out that the corporate media haven't seemed to want to touch this (do you still wonder why?), but let's make the Missing Public Discussion about H.R.1489, The Return to Prudent Banking Act of 2011, sponsored by Marcy Kaptur (D-Ohio), a tad less Missing. You can follow the progress of the bill HERE. As you follow along, note what I predict will be the Usual Suspects fighting tooth and nail so that the bill dies, or becomes inert, de-fanged. This too, should be no surprise. But if we pressure our Congressentities enough and talk about the bill enough, maybe, just maybe we can get this bit of elephant out of the room, leave us a bit more breathing space. It's a long road to hoe, and we know it. But we gotta, right?

Two Occupy manifestoes of clamor for reinstating Glass-Steagall provisions (proto-pro H.R. 1489 statements?) are HERE and HERE.

Has deregulation ever been a good idea? I'm willing to listen to arguments for deregulations in the comments section, but by and large I agree with Double Dip Politics.

YES on H.R. 1489, the Return to Prudent Banking Act of 2011!
Here's yet another dirty, stoned hippie from Occupy Wall Street, patiently explaining to the cops what the repeal of Glass-Steagall wrought:


Anonymous said...

One of the reasons I voted for the liberal demcocrats here in sunny england was because of Nick Clegg mentioning he wanted to have something similiar put in place in england. now they are just a conservative scapegoat. liberal democrat policy seemed quite similiar to some of social-libertarian ideas gaining momentum in america.

Annabel Lee said...

The biggest problem with the entire deregulation movement, something that I should have covered more on my site, is that when the topic comes up, Democrats don't put up much of a fight. They do some grand posturing, then concede. The regulations are stripped and we're all left wondering why nothing way done. If the Dems would just grow some balls and stand up to the GOP, many of the problems we're facing might have been avoided. Instead, we've seen Glass-Steagall repealed, and the talk isn't about the new Wall Street reforms, but rolling them back to what they were before the mess we're still dealing with.

michael said...

@Homing Bohm: I think - maybe? - at this point there needs be a broad public constituency, from all parties, that both understands the problem, has an idea for a way to reign in financial gambling, and actively agitates for its enactment and implementation.

Having said that, I need to find the time to understand the deeper dynamics of the British political machine. I confess a basic ignorance.

@Annabel Lee: I think the main reason almost all Dems have no "balls" is because of a problem that's intertwined with the deregulation of the banking system: the banks and corporations have bought almost all members of Congress and the Senate.

I made a list a few months ago of how many of the 435+100 that I thought were worth anything decent. I had a tough time coming up with 20.

In my highly informal discussions with other Occupiers here in the Bay Area, the two Big issues seem to be 1) get rid of the Federal Reserve, and 2.) Get money out of politics as much as possible. I harmonize more strongly with item #2, but the anti-Fed people are really interesting, and astonishingly well-informed.

Anonymous said...

@michael: I think we both have the same problem. I confess an ignorance toward the american system of politics. although, from what i have heard, the layout of the american system is simpler than the british system.