You all may have a good point. I'm not familiar with this particular issue
on banking, but the US hasn't been free from economic downturns and
depressions for 80 years. Also it is a widely accepted fact that the bubble of
2008 was caused by the poor regulation because of government entities such as
Fanny May. If Fanny May hadn't existed or hadn't been commissioned to
buy debt no matter how bad the note was the housing bubble would not have
happened. The free market would not have artificially inflated and erupted.
acutally the Banking Affiliates Act of 1982 contained many of the restrictions
contained in Glass-Steagal and that act remained in force - the Fed just
neglected to enforce it. The Fed was to blame, but dudd-frank's response
gave the fed MORE power. How does that make sense - be rewarded for failing?Another failure of dudd-frank is that the big banks have a LARGER
percent5age of the nation's deposits now than they did pre-crisis.
dudd-frank was supposed to end too-big-to-fail, but obviously it enshrined and
further entrenched it.
There was 28 banks in trouble. While there was 7000 " main street"
banks that did nothing wrong. The Govt. lowered the boom on all of them. How
would you feel being punished for what someone else did?
@m.g.scottThere was a lot of "irrational exuberance" in
1999, when people like Alan Greenspan thought that the market could never be
wrong. The banking industry campaigned for the repeal of Glass-Steagall on the
grounds that it limited their ability to compete. And in fact, yes, it did
enable a lot of bankers to get rich - by gambling with our money. They still
like the idea of gambling with our money, and you can bet they're getting
rich doing it again.
OK, thanks for the history lesson, but why did Clinton and the Congress sign
that repeal in the first place? And now that we can see the downside of it,
there must have been some ostensible "upside". Otherwise, why did
Clinton sign it? And now that the downside has been shown to be much worse than
the up, why doesn't it get traction for reinstatement? Maybe Boehner,
Reid, Obama, and a few others need to get together for a pow wow on this. I
think most everyone would rather solve the problem than blame the people who
made the mistake. It does occur to me that with all the talk of the rich
getting richer, (as todays Forbes 400 proves) maybe some are getting richer on
the de-regulated banking industry. Just a thought. And any thoughts from you
first two posters?
It is amazing to me so many folks can ignore the financial meltdown caused by
deregulation. Before Glass-Steagall we had many depressions on a regular basis.
After we had none for almost eighty years. We missed another depression by a
whisker, and we still have not recovered. It wasn't broke, put it back like
If we want to prevent another financial crisis, we need to stop the big banks
from gambling with their customer's money. We need to reinstate the
Glass-Steagall Act, which separated commercial banks from investment banks.
This Act was repealed in 1999, and the repeal was signed by President Clinton.
The repeal enabled the excesses that followed, which led to the financial
collapse in 2008. Although we've passed some minor regulations on banks
since then, the commercial and investment banking activities are still
commingled, allowing the banks to continue gambling with our money (and with
FDIC insurance, in case their gamble loses). There is some bipartisan support
for a new, updated version of the Glass-Steagall Act (Elizabeth Warren, John
McCain, Maria Cantwell, Angus King), but it hasn't gained traction because
the banks want to continue gambling our money without risk to themselves, and
they provide a lot of cash for political campaigns. We should
pressure our senators and congressmen to pass this important safeguard, or
prepare for an another collapse.