Reply #7: Agree totally. It is at the root of the banks' enormous power over the govt. [View All]

All the problems OWS wants addressed are tangled up in the banks' power over our lives. It was the repeal of Glass-Steagall that allowed for consolidation of the insurance industry, brokerage firms and regular commercial banks into one giant "vampire squid."

Glass-Steagall had kept commercial banking separate from investment banking. It was a good thing because the two financial entities have different cultures. Commercial banks are supposed to be about protecting deposits, and the securities business is about speculation and risk. Once the act was repealed, commercial banks and investment banks were allowed to merge.

Now they could both sell mortgages to homeowners and sell fancy investment structures on Wall Street. They could sell increasingly dicey mortgages just so long as another sucker was picking up the garbage. It led to no-doc, interest-only, option-ARM, no money down mortgages being repackaged as "sound investments" and sold as "stable assets" to city pension plans, etc. Then the housing bubble burst and all hell broke loose.

Yes, there are other aspects of the system that makes the whole system broken. But OWS is occupying the right place: where the banks are. How do we fix the part of the system that is broken because of the banks? Bring back regulations. Bring back Glass-Steagall.