I remember saying, over and over again, during the Bush Regime, that we had such fond memories of Bill Clinton,k only because he benefited from comparison to his successor, the worst President in US history. If fact, Clinton was the most conservative Democratic president in my lifetime, that goes back to Harry Truman. In my opinion, his worst policy was to support the removal of Glass-Steagall, the law that separated commercial banks and investment banks. One Democrat led the unsuccessful fight to prevent that and continues to lead the fight to restore it. He talked to Bill Moyers.
Bill Moyers talks with former Senator Byron Dorgan about making sure big banks play by rules that protect consumers from financial calamity, and how those big banks continue to leverage power and influence to avoid responsibility while maximizing profits. Dorgan was a nearly-lone voice in Congress in 1999 when he predicted economic calamity following a repeal of the Glass-Steagall Act and its protective measures. But given the economic meltdown nearly 10 years later, it turned out to be one of the most prescient speeches in American political history.
“If you were to rank big mistakes in the history of this country,” Dorgan tells Moyers, “that was one of the bigger ones, because it has set back this country in a very significant way and caused so much heartbreak and heartache, and a near total collapse of the American economy.”… [emphasis added]
Inserted from <Truth-out>
Here’s the video.
Obama and almost every Democrat supported both of those Dorgan amendments to Dodd-Frank, which would have broken up the TBTF banks and made Dodd-Frank much stronger. Although many blame Obama, the real blame belongs to the Republican Party, who filibustered and goose-stepped unanimously against them, plus the two DINOs that goose-stepped with the Republicans. They were Joe LIEberman (ASSHOLE-CT) and “Benedict” Nelson (TURNCOAT-NE). The votes fell one short of sixty.
The primary functions of Investment bankers are to provide venture capital and to speculate. The primary functions of commercial bankers are to hold people’s accounts and to lend. Under Glass-Steagall deposits supported lending, which when done properly is safer, but produces lower returns, while investments supported speculation, which is more risky with a potential for higher returns. Without Glass-Steagall to keep those functions separate, Banksters can use deposits for high risk speculation, leaving little funds for normal lending.
Dodd-Frank did some good things, but we need Glass-Steagall back in addition to other reforms to curb Bankster predation on US citizens.
9 Responses to “The Need for Glass-Steagall”
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Tom I agree with you entirely here – Clinton made a huge mistake, and you’re absolutely right – he moved the liberal party way over to the right – it changed the democratic party forever – that’s why I’m so insistent on getting a third party going – these dems are the republicans of my youth (a long time ago) – I believe even Clinton regrets Glass-Steagall, but it’s hard to say how much Citi had him by the balls, as I recall Clinton was being almost “blackmailed” by (don’t quote me but I think his name was Weil, who ran Citi) threatening with lobbyists – politics is becoming more and more like an auction block – sort of a “buy a picnic with ___ for 4-8 yrs” fill in the blank – it’s got to change! Although it’s more blatant now after Citizens United – there was some “priming” going on before all that. Hope the “investigation” on the banks works – better late than never I suppose!
How do you get to see Moyers earlier than we do in NY – he isn’t aired until tonight here! Because I like to watch him on the “larger screen” I’m not tuning into your video – I like surprises. Moyers is giving me a great education! I’m not alone he’s getting a lot of flak even from PBS. I guess the dirty corporate bastards can’t stand to see un-muzzled truth so blatantly researched and in your face from a beloved journalist – he’s probably putting his life at risk!! (certainly his job)
Lee, one word you said has no justification: forever. While Clinton did move the party top the right, there is no reason to conclude that it will stay there forever. In fact, it is already moving back toward the left. I didn’t see it. The clip was on his website.
You’ll get no argument from me here. Bill Clinton did 2 very bad things when he was President. One was Glass-Steagal being repealed and the other was NAFTA. I can excuse all the little things.
I do very much agree!! NAFTA has been a disaster ! and and glass- Steagal !- My Golly , my late Grandmother often hated Bankers , saying she had never known an honest one … She was correct!!
Count me in!
TomCat,
Thank you for pointing out how it was really the Republicans who pressed for a repeal to Glass-Steagall and that Obama was not at fault. These damn libertarian Republicans will be our ruination yet!
Jack, it was both. There were only eight Sentaors that opposed the repeal, all Democrats.
I think the US needs Byron Dorgan back coupled with Bernie Sanders to get at some meaningful reforms. He appears to have a very good grasp of the situation.
I remember a video of Elizabeth Warren doing a history lesson. After Glass-Steagall was enacted about 1935, there were no bank failures for about 50 some odd years. Then the repeal and there was the Savings & Loan crisis; then there was Enron; then there were the failures and bailouts of 2008. You’d think that would resonate with people. I like how Dorgan referred to it as ‘an orgy of greed’. The banksters were making money hand over fist. Another phrase he use was banksters ‘chaffing under the regulations’. The only reason they are chaffing is that they are like 2 year olds yelling “Me! Me!”.
If a bank is TBTF, then they are too big to bail out. The problem with that, which I think a lot of people don’t quite understand. is that if they go down, the whole economy goes. Dorgan is right when he says the banks have to be broken up into smaller pieces. They have to be separated again, as the original Glass-Steagall did into the deposit/lending institutions and the riskier investment institutions.
Agree.
You’re right. Democrats learned their mistake. Republicans are the ones that insist that it not be restored.
Exactly. There is no way we can protect ourselves from having to bail out a TBTF bank other than breaking it up.