A Move to Revive Glass-Steagall

[babylonsister]

http://washingtonindependent.com/69877/a-move-to-revive-glass-steagall

A Move to Revive Glass-Steagall
By Mike Lillis 12/7/09 1:45 PM


Ten years ago, Congress dismantled the decades-old Glass-Steagall Act, breaking down the firewalls between commercial banks and securities houses, and helping Wall Street firms grow into the too-big-to-fail institutions that exist now. There’s been a great deal of debate about the extent to which the death of Glass-Steagall contributed to the global economic collapse that plagued the past two years — not to mention the trillions of dollars in government bailout cash that were required to stabilize the nation’s banking system. But some House Democrats place the blame squarely on the repeal of Glass-Steagall, and today they introduced legislation to reinstate it.

“{The repeal} was a recipe for disaster because these banks were empowered to make large bets with depositors’ money and money they didn’t really have,” Rep. Maurice Hinchey (D-N.Y.), who sponsored the new bill, said in a statement.

When many of those bets, particularly in the housing sector, didn’t pan out, the whole deck of cards came crumbling down and U.S. taxpayers had to come to the rescue. The absence of the protections in the Glass-Steagall Act essentially turned these financial giants into quasi-government entities because they were only able to survive the recent collapse with government assistance.

Hinchey’s proposal would force the giants of Wall Street to choose whether they wanted to be commercial banks or investment houses, but they couldn’t be both. (A simple lender, for example, couldn’t also be an underwriter.) Co-sponsors include Democratic Reps. John Conyers (Mich.), Peter DeFazio (Ore.), Jay Inslee (Wash.) and John Tierney (Mass.).

The House Rules Committee will meet Tuesday to consider the proposal before it can move to the chamber floor as part of a larger tax bill the Democrats have to pass by the end of the year.

[BrklynLiberal]

1. YES!!!!!!!! It would be a good place to start...

[me b zola]

2. It will be interesting--and instructive--to see who does NOT support this

It would be a good start to fixing the mess that we're in, I hope we can get it passed.

[mopinko]

5. agree with you

nothing like a little show of hands as we ramp up to elections. can they stretch this out so they are voting right before they go home for election day?

[Phoebe Loosinhouse]

3. Paul Volcker has championed this. nt

[DebbieCDC]

4. Glad to see my rep (Inslee) supporting

I'll send him an email of thanks. He's great about responding to petitions and emails -- I've gotten many responses from him.

[Froward69]

6. +100

:kick:

republicans try to say it was loose lending by fanny and freddy but it is the repeal of Glass-Steagall that actually did it.

[alsame]

7. Good. I even know a few Republicans who are

in favor of this.

[alsame]

8. Dupe.

[laughingliberal]

9. This is great news. Hope they do it. It can not have escaped anyone's notice...

that, as long as Glass-Stegall was the law, we never had a meltdown of this magnitude. Reinstating it would be a good start to re-regulating these institutions.

[OutNow]

10. Great News for Henry B. Gonzales fans - I'm one

Years ago the great congressman from San Antonio Texas, Henry B. Gonzales, was chair of the House banking Committee. He was a real progressive and fought for consumer's rights. When the first efforts began to repeal the 1933 Glass Steagall Act he warned that the bill would pass "over my dead body". And that's what happened. Gonzales retired in very ill health in 1998. The act was repealed in 1999.

I am very happy to see my congressman, Pete DeFazio, is one of the cosponsors to bring bring back the regulation ten years after its repeal.

[Snarkoleptic]

11. This gets pretty close to the main nerve, so we can expect to hear the pig-men sqeal loudly.

[Jkid]

12. Let them sqeal

They had their change to shape up.

[Soylent Brice]

13. long overdue. great news!

K&R

[RB TexLa]

14. Why don't we outlaw cross state banking too? Or cross parish banking for that matter?

:crazy:

[nashville_brook]

31. so, you're not in favor of re-instating Glass-Steagall? Why?

[Enthusiast]

39. Explain yourself.

You appear to be making fun of those that would restore Glass-Steagal.

It is the near universal opinion here on DU that the Gramm-Leach-Bliley Act led directly to the abuses that caused the economic meltdown. Do you have something to say about this? Is your real name Phil Gramm?

[PVnRT]

41. Ignore him. He loves trolling like this.

[RB TexLa]

52. There is no reason to not allow a firm to compete in both lines of business

as far as the abuses, all we have to do is let a huge bank fail and the abuses will retreat. Remove the term "too big to fail" from our thinking and there will be far less risk taken.

[Enthusiast]

53. Oh yeah.

If we had allowed the "too big to fail banks" to fail we would now be in the second great depression. Trusting the greedy to exercise restraint is no way to run a financial system.

[azureblue]

49. mon frere

I think you been eatin' too many nutria down dere.

[PVnRT]

50. I don't regulate banks with you

[Edweird]

15. good.

[nc4bo]

16. Damn, it's about time. What took 'em so long?!

The moment Obama became POTUS, I thought this would be one of the first items on his to-do list.

[Greyskye]

17. Duh.

That would be some legislation with legs. All these Republicans keep yelling that the repeal happened under Clinton. OK, so by saying that they've admitted that repealing G-S was a mistake.

[Canuckistanian]

18. Here's hoping

The repeal of Glass-Steagall enabled the giant casino that used to be the people's pensions and their kid's futures.

I doubt whether this bill would go anywhere, but let's just pretend for a minute, shall we?

[laughingliberal]

19. Yes, I often take these mental excursions to a land the people elect representatives that, in turn,

represent them. Then I wake up in America.

[Shanti Mama]

20. When I worked at the House of Morgan in the 70s, the GS act

was HEAVILY enforced. We could not lunch with the folks at Morgan Stanley or even with those at our own bank who managed high net worth investment accounts. It was a good thing and should be reinstated. Absolutely.

[Hissyspit]

21. k&r nt

[barbtries]

22. does the proposal have a name?

i want to write to my rep.

[MilesColtrane]

36. Hinchley amendment to H.R. 4173

It has to get out of the Rules Committee first.

They meet today at 3pm Eastern.

Rep. Louise Slaughter is the chair of the rules committee.

You might call or email her.

[Mudoria]

23. Long overdue to reinstate this...

[Roland99]

24. Should have been an executive decision made on day 1 back in Jan.

[RaleighNCDUer]

37. And how would that work, exactly?

The pres does NOT write the laws.

[western mass]

25. Don't hold your breath.

The idea that the corporate Dems in the senate and white house would let this happen is just...laughable.

[earth mom]

26. Yeah, I'm not holding my breath either. nt

[Le Taz Hot]

32. We need to hold their feet to the fire on this one.

Trouble is, the average American has no idea what G-S was and how it DIRECTLY relates to the banking crash. And the MSM sure as hell won't educate them. Too busy with their 24/7 coverage of Tiger Woods. Or Jon Gosselin. Or missing white women. Anything but REAL news.

[RufusTFirefly]

42. +1

Hate to sound like a fatalist, but it would require a major uproar to have G-S reinstated.
Given that much of Congress (obviously not Hinchey though) is in the back pocket of the financial services industry, it's doubtful that they will alienate their sugar daddies.

[chrisa]

46. Yes, there's alot of tools in Congress on both sides.

The Corporations say 'jump,' and they say 'how high?' It makes regulation that much harder.

[deutsey]

27. It should never have been dismantled.

It should be revived, but I don't know that there's any backbone in Congress to go against the masters who, like Bob Dylan once sang, "make the rules for the wisemen and the fools."

[earcandle]

28. Way to go! Here is a song for the Congress critters who are taking this on!

Crashing into the Future (The Granite Countertops)

We got somewhere to go!

[Fire1]

29. Absolutely! K&R

[swilton]

30. One small step for Man

[AllyCat]

33. Restore Glass-Steagall and make insurance companies have to follow

Anti-trust laws....those 2 things would do a great deal for stopping the mess we are in from happening again. That and investigating and raiding the banksters assets so we can get some of our money back.

[MilesColtrane]

34. Please email or call these members of the House Rules Committee in support of this amendment.

Chairwoman Louise M. Slaughter New York

http://www.louise.house.gov/index.php?option=com_content&task=view&id=506&Itemid=150


James P. McGovern Massachusetts
David Dreier California
Ranking Minority Member

Alcee L. Hastings Florida
Lincoln Diaz-Balart Florida

Doris O. Matsui California
Pete Sessions Texas

Dennis Cardoza California

Virginia Foxx North Carolina

Michael Arcuri New York

Ed Perlmutter Colorado

Chellie Pingree Maine

Jared Polis Colorado

[niceypoo]

35. Glass-Steagall was rendered toothless under Reagan

http://www.answers.com/topic/depository-institutions-deregulation-and-monetary-control-act">The Depository Institutions Deregulation and Monetary Control Act of 1980 essentially reversed Glass-Steagall.

[Enthusiast]

38. This is what should be done!

And some knew it was wrong then, in 1999.

http://www.youtube.com/watch?v=veAOoQEy0PI

[myrna minx]

40. K&R n/t

[HCE SuiGeneris]

43. Far past time.

A measured response to keep us from storming the Bastille.

[Common Sense Party]

44. How EXACTLY did the repeal of GS lead to the credit crisis?

Can anyone walk me through, step-by-step, how one led to another?

Repeal of GS allowed banks to be bigger, yes. But are we saying that the global meltdown would not have happened if GS hadn't been repealed?

[chrisa]

45. We jumped into the flames and got burned the last time.

Funny how we forgot, and did it again (1929, 2009).

[benld74]

47. FINALLY!!!!! ONE BIG HELLL YA!!!!! ABOUT TIME!!! DO IT!!!!

[avaistheone1]

48. What the hell is Congress waiting for?

Get this one done NOW.

[fascisthunter]

51. it should never have been repealed in the first place