A chance to Prevent Another Wall Street Meltdown: the 21st Century Glass-Steagall Act
Senators Elizabeth Warren, Angus King, Maria Cantwell and John McCain have introduced a bill to reinstate the Glass-Steagall Act, which had been in place from the 1930s — in response to the 1929 Crash — to 1999. The Glass-Steagall Act established a firewall between commercial and investment banking, for the exact purpose of preventing a repeat of the Crash of 1929.
In 1999, Wall Street ordered its prostitutes in Congress to get rid of all these cumbersome banking regulations that were “no longer necessary.” Then-Senator Phil Gramm duly spreadeagled himself, gyrated up a storm, and rewarded his big-spending johns by repealing the Glass-Steagall Act.
Nine years later, Wall Street was rewarded with the 2008 global meltdown and a multi-trillion dollar bailout/handout from taxpayers. Mission Accomplished.
In addition to reinstating the original Glass-Steagall, the 21st Century Glass-Steagall Act is updated to prohibit the modern malignancies that led to the 2008 crash. Derivatives trading, and some of the more slippery hedge fund and private equity activities — all would be off limits to commercial banks.
Elizabeth Warren said:
“Americans want safe banks. The banks that handle their checking and savings accounts should be rock-solid secure, and they should not be juicing their profits by taking those insured deposits and insuring them in wild financial schemes.”
John McCain said:
“If enacted, the 21st Century Glass-Steagall Act would not end Too-Big-to-Fail. But, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system, and reduce risk for the American taxpayer.”
With Congress being packed to the rafters with Wall Street’s skankiest prostitutes, one might think the 21st Century Glass-Steagall Act hasn’t got a prayer of becoming law. Elizabeth Warren addressed this concern:
“People said we could never get the consumer protection bureau. But we fought for it, and now we have an agency protecting consumers from credit card and mortgage scams.”
And here’s how YOU can help. Please sign this petition urging Congress to pass Elizabeth Warren’s Glass-Steagall Bill.
posted by Tom Harper @ 2:18 PM
14 Comments:
This bill is absolutely necessary if we want to prevent another meltdown. Anyone who is interested in how the meltdown happened should read "Griftopia" by Matt Taibbi, in which all is explained in a way that laypeople can understand. One of the biggest problems was the repeal of Glass-Steagall, which then allowed banks to call any kind of "securities" cash reserves. They simply bundled all the uncollectible debt, including junk mortgages, into a big wad of "securities" and used them to guarantee the loans. This would never have happened without the repeal of Glass-Steagall.
We all need to support this new legislation. Write to your congresspeople.
Let's bring some sanity back to our economy.
We all need to support this new legislation. The repeal of Glass-Steagall was the biggest factor in the meltdown of banking and nearly the ruin of the world economy.
Anyone who is interested in understanding the anatomy of the meltdown should read "Griftopia" by Matt Taibbi. He explains it in a way that one can understand without an economics degree.
Basically, when the banking regulations were scrapped, it allowed banks to have "reserves" to guarantee loans that were not cash. So they bundled their junk bonds, uncollectable debts, and shit mortgages into "security packages" and used them in lieu of cash. That's a pyramid that couldn't stand at all.
Let's all support this new legislation and try to bring some sanity back into economics. Let's try to prevent this from happening again.
This is a no-brainer. We need banks to be regulated again.
I'm from Washington and I'm proud of Maria Cantwell. You go, girl!
There is no chance (hope) of preventing another meltdown. They have turned our country into a giant casino and gambling is addictive.
No doubt that this will help prevent future shenanigans but it does nothing about all the bad debt in the form of derivatives which are already out there.
Maybe we should just do an iceland and declare all debt private and government null and void. Giving all a fresh start. Then perhaps this bill stands a chance of success in the long term.
We are going to reset in any case !
Might be better if it's a controled willing reset rather than a riot and anarchy....
I would get behind this.
I'm proud to support this legislation. Thanks for sharing!
SM: I keep meaning to read Griftopia. I love everything I've ever read by Matt Taibbi.
The scrapping of Glass-Steagall was definitely the cause of our economic disasters these last few years. Phil Gramm, and the rest of his fellow Wall Street prostitutes, should be tied to the back of a pickup and dragged across the country on Interstate 80.
CH: True. Unfortunately, in today's corrupt cesspool formerly known as "Congress," being a no-brainer doesn't help.
Anonymous: I'm proud too.
Mr. C: [sigh] You're probably right. But hoping and dreaming can be so uplifting sometimes.
Spud: I've always thought we should have done what Iceland did after the 2008 crash. No bailouts, let the chips fall where they may, let it burn. The country was devastated for a few years, but now their economy is healthier than ever.
Jess: Me too.
Jim: Me too. Thanks for signing.
If Richard Parsons and Sanford Weill truly believe what they say and are prepared to take the lead as reformist, then maybe this bill has a chance.
Erik
Erik: Let's hope.
I don't wish to be the pessimist in the room but after seeing how the republicans have voted the last 10 years I'd don't hold much hope for this passing. They will sit back and watch as they whole economy goes down in flames then try to blame it on someone else.
Demeur: I'm hopeful but I won't be surprised if the bill goes down in flames.
This is gorgeous!
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