This is why it happened...

http://en.wikipedia.org/wiki/Glass_Steagal_Act


In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass Steagall Act..

First Glass-Steagall Act
The first Glass-Steagall Act was the first time currency (non-specie, paper currency etc.) was permitted to be allocated for the federal reserve. In addition, the G.S.A. separated investment banking from commercial banking, in effect curbing speculation. The resulting FDIC (Federal Deposit Insurance Corporation) insured all bank deposits up to $5000.

The Glass Steagall Act, as well as FDIC, CCC (Civilian Conservation Corps), Emergency Banking Act, and the TVA (Tennessee Valley Authority) were all products of Roosevelts 'Hundred Days', Roosevelt's first one hundred in office.<5>


Second Glass-Steagall Act
The second Glass-Steagall Act, passed on 16 June 1933, and officially named the Banking Act of 1935, introduced the separation of bank types according to their business (commercial and investment banking), and it founded the Federal Deposit Insurance Company for insuring bank deposits.

Literature in economics usually refers to this simply as the Glass-Steagall Act, since it had a stronger impact on US banking regulation


On November 12, 1999, President William J. Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act of 1933. One of the effects of the repeal was to allow commercial and investment banks to consolidate. Some economists have criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis.<8><9>

Some economists have criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis.<8><9>


Funny how none of the economists THAT matter - the Bernankes, Greenspans, Paulsons et al, seemed to care a twit about its repeal - until maybe a week or two ago.

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited—at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania.

But Gramm's most cunning coup on behalf of his friends in the financial services industry—friends who gave him millions over his 24-year congressional career—came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered dead—even by Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. "Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history.

Full story at link . . .

http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

...Li'l Bush would've eventually signed them. But it'd sure be nice if he'd "just said no" when he could...

...into the 2000 campaign and the (presumably) early Bush admin...

Or perhaps that would've given us a Gore administration, outright?

and shame on Clinton for signing it. :mad:

There was a reason why FDR passed these laws.

But here is the kicker...We are in or are going to be going into another Great Depression. What saved the US from anarchy and civil war in the 1930's was the country's ability to manufacture things. There was still an industrial base in the country at that time that put people to work.

The manufacturing-industrial base of the US is gone. We make french fries now.

What is to save the country from internal strife in the future when the shit really hits the fan?

They're no longer satisfied with stealing milk from our children, they want to drink our children's blood as well.

When in reality, he pulled the recipe out, but they cooked the meal... and the books.

How many years were the Republicans in control and did nothing to correct this horrid event they are now clutching their pearls over?

Please.

Which is to say, fascism won out because there is nothing "conservative" about it except to say that they were able to "conserve" THEIR assets with OUR money.

This is what happens when DEMOCRATS forget what they are supposed to stand for and are corrupted by corporations.

He was from Lynchburg, Virginia. Guess who lived in his mansion up until recently? None other than Jerry Falwell, Glass's house became the residence of the head of Liberty University. Off topic, I know, just thought I'd throw that out there.