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Edited on Thu Oct-20-11 02:33 PM by robdogbucky
Reprinted in its entirety with the express permission of the author, Steve Pizzo: (News For Real
In the summer of 1991 I got a call from Rep. Ed Markey's office. Markey wanted me to come back to Washington to testify at a hearing, and oppose the repeal of the Depression era Glass-Steagall Act.
The act was passed in the wake of the Wall Street and banking collapse that led to the last Great Depression, barring commercial banks from speculating in the stock markets.
In order to get people to put their money back in banks they no longer trusted, congress also established the Federal Deposit Insurance Corp. (FDIC) insuring the safety of their deposits.
And that stabilized banking until Ronald Reagan started dismantling the bank regulatory regime that led to the S&L crisis within five years. Then, in 1991 Wall Street and the big banks spent millions buying the political support needed to launch what would prove a successful attack on Glass-Steagall.
I got in to a argument at time with Republican Rep. Jim Leach of Iowa who supported repeal. His argument was absurd on it's face, especially after what he'd just seen happen in the wake of saving and loan deregulation. Leach's argument was that Wall Street firms, like Merrill Lynch and Goldman, would inject market discipline into what he believed was a poorly run banking industry.
I just laughed, saying that the flow would be the other way around, with banks injecting federally-insured deposits into risky Wall Street investment schemes. I told him, and later congress, that if they thought the $160 billion S&L crisis was a mess, just repeal Glass-Steagall -- and stand back.
Though I knew all to well that it was a waste of time, I agreed to testify, if for no other reason so none of them could say, "we had not idea this could happen." I told them not to repeal Glass-Steagall unless the first confirm that someone had also repealed the laws of human nature. That testimony is online HERE. )
They repealed Glass-Steagall, because they'd been paid to do just that. And, the rest is history -- current history.
Oh, and the bills are starting to come in now:
FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets
Potential losses on Bank of America's massive $75 trillion book of risky derivative contracts has just been dumped onto the FDIC by the Federal Reserve.
Just to get a handle on how much dough that is, the entire current US debt is $14.7 trillion.
So, let's get that puppy reinstated. A petition is being circulated to do just that. It's online HERE
"Correct spelling is one of the arts that are far more esteemed by schoolma'ams than by practical men, neck-deep in the heat and agony of the world."
-H.L. Mencken (1880-1956), writer, journalist, critic
Have a nice day,
Steve
News For Real
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