Clinton on Glass Steagal

[portlander23]

Robert Reich: Hillary Clinton's Glass-Steagall

Hillary Clinton won't propose reinstating a bank break-up law known as the Glass-Steagall Act -- at least according to Alan Blinder, an economist who has been advising Clinton's campaign. "You're not going to see Glass-Steagall," Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall.

This is a big mistake.

[deutsey]

1. "Blinder"...what an appropriate name n/t

[Armstead]

2. Call it what you want -- We Need ANTI TRUST, ANTI MONOPOLY Regulations and Enforcement

Glass Stegal, Glass Schmegal -- What is important is to restore the will to actually control these Massive Financial Monopolies, and restore some measure of competition and reduce the size of the Too Big to Fail banks, and then to actually make them behave through active regulation.

[aidbo]

15. What about a glass smeagol?

[appalachiablue]

3. K & R. The status quo is just great for the Investor Class and 1%. Why change that, for who?

Oh them, the little people. They don't count.

[Erich Bloodaxe BSN]

4. I pity politicians that YouTube exists.

It must suck to have people able to toss not only your own words in your face, but actually show you saying them.

[frylock]

10. And to think that video documentation of a candidate's own words..

is now considered to be bashing.

[BlueStateLib]

5. Senator Warren has said she considers Glass-Steagall more of a symbol

Senator Warren has said that one of the reasons she’s been pushing reinstating Glass-Steagall — even if it wouldn’t have prevented the financial crisis — is that it is an easy issue for the public to understand and “you can build public attention behind.”

She added that she considers Glass-Steagall more of a symbol of what needs to happen to regulations than the specifics related to the act itself.

When Senator Warren was pressed about whether she thought the financial crisis or JPMorgan’s losses could have been avoided if Glass-Steagall were in place, she conceded: “The answer is probably ‘No’ to both.”

http://www.democraticunderground.com/?com=view_post&forum=1014&pid=1174029

[JayhawkSD]

7. Yes. See my post at #6. nt

[JayhawkSD]

6. Robert Reich misleads again

"Hillary Clinton won't propose reinstating a bank break-up law known as the Glass-Steagall Act"

Emphasis mine. Glass-Steagall prevented deposit banks from making speculative investments (using depositor's money) and was not, per se, a "bank break-up law." It protected the government from having to pay out money when speculative investments failed and those insured deposits were lost. It did not protect people or banks, it protected the government and, by extension, the taxpayer.

The latter is purely nominal, however, as bailout funds are borrowed money which is never paid back and do not directly affect the taxpayer to any significant degree. Well, other than to the degree that government debt affects the economy in general, but that has become a fact of life. Government debt is going to continue to increase, so it doesn't really matter what the purpose of the borrowing is.

The repeal of Glass-Stegall did permit some investment banks to merge with deposit banks, but that is not what caused the "too big to fail" issue. That was caused by a failure of anti-monopoly regulation, and restoring enforcement of those still-existing laws is what needs to be done to solve that problem.

We need to do to the big financial institutions and pharma houses what was done to the Bell Telephone System. Those laws still exist, all we need to do is enforce them.

[Agony]

14. "The repeal of Glass-Stegall did permit some investment banks to merge with deposit banks"

how is unwinding this not breaking up banks?

a "tuned up" return to Glass-Stegall is the functional equivalent.

from wiki about post 2010 GS legislation…
"On July 13, 2013 Senator Elizabeth Warren (D-MA) introduced alongside John McCain (R-AZ), Maria Cantwell (D-WA), and Angus King (I-ME) the 21st Century Glass–Steagall Act (S.1282). Warren wrote in a press release: "The 21st Century Glass-Steagall Act will reestablish a wall between commercial and investment banking, make our financial system more stable and secure, and protect American families."[13] Instead of restoring repealed Glass–Steagall sections 20 and 32, the bill would:

1) separate traditional banks that offer savings and checking accounts insured by the Federal Deposit Insurance Corporation from riskier financial services like investment banking, swaps dealings, hedge funds and private equity activities, as well as from structured and synthetic products, and other products, that did not exist when Glass–Steagall was originally passed.
2) define the “business of banking” to prevent national banks from engaging in risky activities and bars non-banking activities from being treated as "closely related" to banking. These restriction would counter regulatory loopholes for risky activities, because the Office of the Comptroller of the Currency and the Federal Reserved used these terms to allow traditional banks and bank-holding companies to engage in high-risk activities.
3) address the issue of too big to fail: by separating depositary institutions from riskier activities, large financial institutions will shrink in size, become smaller and safer and won't be able to rely on federal depository insurance as a safety net for their risky activities. Although some financial institutions may still be large, the implicit government guarantee of a bailout will be reduced because such institutions would no longer be intertwined with depository institutions.
4) institutes a five years transition period and penalties for any violation."


granted, there are other issues that need addressing, like the unwinding of BHC's created during the great bank failure...

[nichomachus]

8. Why in the world would Hillary change what works for her bosses?

Impoverished middle class
Endless war
Bomb, bomb, bomb
Too big to fail banks

It's all good.

[Baitball Blogger]

9. Can someone give me the short notes?

Who does Glass-Steagall affect? I hear people in business mention it, but I don't understand how it affects the normal sales process.

[BlueStateLib]

13. only federal reserve member banks were under glass steagall regulations

and FDIC insurance probably effects the most people

[Thinkingabout]

11. Did you know Glass Stegall would not have prevented the finanical meltdown?

[portlander23]

12. Robert Reich on Glass-Steagal

A Crisis of Public Morality, Not Private Morality

In the 1990s it brought a speculative binge culminating in the bursting of the dotcom bubble. At the urging of Wall Street, Bill Clinton repealed the Glass-Steagall Act, which had separated investment from commercial banking.

In 2001 and 2002 it produced Enron and the corporate looting scandals, revealing not only the dark side of some of the most admired companies in America but also the complicity of Wall Street, many of whose traders were actively involved.

The Street's subsequent gambling in derivatives and risky mortgages resulted in the crash of 2008, and a massive taxpayer-financed bailout.

The Dodd-Frank Act attempted to rein in the Street but Wall Street lobbyists have done everything possible to eviscerate it. Republicans haven't even appropriated sufficient money to enforce it.

The final blow to public morality came when a majority of the Supreme Court decided corporations and wealthy individuals have a right under the First Amendment to spend whatever they wish on elections.

Public morality can't be legislated but it can be encouraged.

Glass-Steagall must be resurrected. Big banks have to be broken up.