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2016 Postmortem
Related: About this forumRobert Reich: Why Hillary Clinton Is Wrong for Refusing To Resurrect Glass-Steagall
Robert Reich: Why Hillary Clinton Is Wrong for Refusing To Resurrect Glass-SteagallHillary Clinton wont propose reinstating a bank break-up law known as the Glass-Steagall Act ... This is a big mistake.
Its a mistake politically because people who believe Hillary Clinton is still too close to Wall Street will not be reassured by her position on Glass-Steagall. Many will recall that her husband led the way to repealing Glass Steagall in 1999 at the request of the big Wall Street banks.
Its a big mistake economically because the repeal of Glass-Steagall led directly to the 2008 Wall Street crash, and without it were in danger of another one.
For more than six decades after 1933, Glass-Steagall worked exactly as it was intended to. During that long interval few banks failed and no financial panic endangered the banking system.
But the big Wall Street banks werent content. They wanted bigger profits. They thought they could make far more money by gambling with commercial deposits. So they set out to whittle down Glass-Steagall.
Finally, in 1999, President Bill Clinton struck a deal with Republican Senator Phil Gramm to do exactly what Wall Street wanted, and repeal Glass-Steagall altogether.
To this day some Wall Street apologists argue Glass-Steagall wouldnt have prevented the 2008 crisis because the real culprits were nonbanks like Lehman Brothers and Bear Stearns.
Baloney. These nonbanks got their funding from the big banks in the form of lines of credit, mortgages, and repurchase agreements. If the big banks hadnt provided them the money, the nonbanks wouldnt have got into trouble.
This is precisely what the Glass-Steagall Act was designed to prevent and did prevent for more than six decades.
Hillary Clinton, of all people, should remember.
Its a mistake politically because people who believe Hillary Clinton is still too close to Wall Street will not be reassured by her position on Glass-Steagall. Many will recall that her husband led the way to repealing Glass Steagall in 1999 at the request of the big Wall Street banks.
Its a big mistake economically because the repeal of Glass-Steagall led directly to the 2008 Wall Street crash, and without it were in danger of another one.
For more than six decades after 1933, Glass-Steagall worked exactly as it was intended to. During that long interval few banks failed and no financial panic endangered the banking system.
But the big Wall Street banks werent content. They wanted bigger profits. They thought they could make far more money by gambling with commercial deposits. So they set out to whittle down Glass-Steagall.
Finally, in 1999, President Bill Clinton struck a deal with Republican Senator Phil Gramm to do exactly what Wall Street wanted, and repeal Glass-Steagall altogether.
To this day some Wall Street apologists argue Glass-Steagall wouldnt have prevented the 2008 crisis because the real culprits were nonbanks like Lehman Brothers and Bear Stearns.
Baloney. These nonbanks got their funding from the big banks in the form of lines of credit, mortgages, and repurchase agreements. If the big banks hadnt provided them the money, the nonbanks wouldnt have got into trouble.
This is precisely what the Glass-Steagall Act was designed to prevent and did prevent for more than six decades.
Hillary Clinton, of all people, should remember.
Related:
Paula Dwyer: Clinton's plan on Wall Street protects husband's legacy
Sirota and Perez: Hillary Clinton's Wall Street Policy Being Shaped By Two Bankers
Yahoo Politics: Hillary Clinton doesnt support revival of Glass-Steagall Act
Democracy Now!: Robert Reich on Glass-Steagall and Bernie Sanders
Clinton: Cooperation, not speeches, is needed to regulate Wall Street
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Robert Reich: Why Hillary Clinton Is Wrong for Refusing To Resurrect Glass-Steagall (Original Post)
portlander23
Oct 2015
OP
When We Stand Together - No Citizen Need Settle For The Lesser Of Two Corporate Evils - Go Bernie Go
cantbeserious
Oct 2015
#1
cantbeserious
(13,039 posts)1. When We Stand Together - No Citizen Need Settle For The Lesser Of Two Corporate Evils - Go Bernie Go
eom
in_cog_ni_to
(41,600 posts)2. K&R I'm adding Robert Reich to my Bernie VP wish list.
He should be in Bernie's Cabinet or maybe Chair of the Federal Reserve.
Kick!
azmom
(5,208 posts)3. K&R