What Would Be the Effect If Obama Re-instated the Glass-Steagall Act?

And why has Obama NOT re-instated the Glass-Steagall Act thus far?

There's this little separation of powers thingy in the Constitution, which means, among other things, that Congress is responsible for enacting legislation. Not the President.

What the banks have done since the repeal of Glass-Steagall is, unfortunately, legal.

There was certainly illegal activity going on.

That's the problem.

Not only is Obama refusing to investigate, he's refusing to admit the truth.

Still, it's been more than two months and he hasn't fixed everything yet!! Damn him, WHERE'S MY PONY?

:sarcasm:

the prez can ask for a bill. He doesn't have to wait on congress to ask him how he feels.

And *poof*, a bill would magically appear on his desk - just like he asked.

...is passed by Congress, not the President?

Certainly a possibility.

Glass Steagall kept banks from diversifying into other financial services and insurance.

Since G/S was squashed, how do you tell an existing bank--that has also expanded into insurance, etc--that
they can no longer do those things?

Would the banks have to spin off these other areas?

Would people lose their jobs?

It seems pretty difficult to backtrack on this one. Unfortunately.

Just rebuilding the wall that protected us from this kind of event. The protections and regulations can be put back in place.

nt

And the answer would be

I dont know what the effect would be

Why hasnt Congress re-isntated it yet? Cause they are owned by Wall Street.

Other laws were passed that superseded its provisions. One does not "reinstate" a law without first going through the whole process of passing that law in the first place.

Let me just say this again for emphasis. Obama is not a dictator. He is the chief officer of the Executive branch. That actually does mean something, despite what Bush would have had you believe.

As for the effect, this can't be stated with any certainty. Glass-Steagall was passed under a specific set of circumstances to prevent those circumstances from taking place. They took place to some extent anyway even before Graham-Leach-Bliley, strongly arguing that we need a new and more robust regulation system than what was provided by Glass-Steagall, one that is not as susceptible to the whim of a given Congress or President.

dealing with banks and corporations and conspiracies.

The Federal Govt also has various agencies with oversight of financial sector.

...for marijuana. It's crazy!

ruin the country. We can't allow working America to have bad morals. White collar crime? They are all criminals to start with so it won't matter. :sarcasm:

None of which are designed to allow the executive to deal with the present situation effectively.

Holder could prosecute people until the cows come home for various crimes here and there, and the banking system is still going to be a disastrous mess just waiting for the next set of criminals to take over.

moving the goalposts may keep the other side from scoring, but it ain't football anymore.

Say he wants the bill on his desk as the poster suggested above.

Again, simply re-writing Glass-Steagall isn't going to cut it.

We need a far more comprehensive system than that, along with some fundamental re-thinking of how the banking system functions at its foundations. This takes time.

Repealing a deregulatory statute isn't enough. They have to come up with a new model for banking. I think the repeal of Glass-Steagall was relatively unimportant compared to the Garn-St. Germaine Act, which eliminated local banking -- the kind of local thrift banking (savings and loans, savings banks) portrayed in the movie, "It's a Wonderful Life."

We could recreate that system, which would be much more stable, and serve our interests much better. But it would take having a positive model, not just "undoing" something of the past.

Also as has been brought out President Obama desn't have the power to repeal or reinstste laws. Timothy Geithner made proposals for regulating the system so that we have a way of winding down things and so that we are getting protected from comapnies that are systemic risks. I believe more details will be forthcoming in the next few months with the administration and in Congress. A very important conversation will be happening about how we move forward and what is needed to keep our fancial system safe in the future. The repeal of Glass-Seegal while a problem was not the only problem.

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Breaking down the big banks and insurance companies into their component parts. It might resemble the breakup of a monopoly such as Ma Bell only applied to several companies instead of just one.

institutions, which would have to be a careful process given how fused they have become. The toxic assets still remain on their books and they have to be removed. No short term fundamental problem would really be solved. In the long term it would be a good thing, however.

in response to Ken Lewis (BofA) bitching about all the banks "being painted with a broad brush." He said we need to differentiate between commercial and investments banks! Whaaaaa

Obama's brilliant response?

"Okay, how about if I call up Byron Dorgan and ask him to reinstate the Glass Steagall Act?"

Lewis' response? crickets

ROLF. I thought it was a brilliant comeback by Obama.

This was recounted in an American Banker article right after the meeting with bank CEOs, but I can't seem to get on to their Web site to get a link.

He is a man stuck in the middle. He's not sitting in Washington twisting his waxed moustache trying to figure out how to be a "corporate whore" today. However, there are tremendous pressures lobbying Obama, the overwhelming majority of them are the voices of Wall Street corporatists. I appreciate his attempts to find a middle way, but ultimately I think it is important that we keep using whatever voice we have to lobby the president to make even more or a break with corporatocracy that put us in this mess, even if doing so is politically risky. It's a risk that we NEED our president to take.