Should We Re-enact Glass-Steagall?

Discussion in 'Congress' started by hvactec, Sep 11, 2011.

  1. hvactec
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    hvactec VIP Member

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    The repealing of the Glass-Steagall Act was heralded as one of the greatest bipartisan achievements of our time. It was passed by an overwhelming majority by both Democrats and Republicans and signed into law by President William Jefferson Clinton on November 12, 1999.

    The minority who spoke out against the repeal were ridiculed and dismissed. Their words ring out as an ominous reminder of our foolishness. Greed can never be self regulated. Conflicts of interest are inherently vulnerable to loss of objectivity. A system without checks and balances is always doomed to fail in the end. If it is not tended and pruned systemically from the get go, it will grow wild and ultimately unproductive in the end.

    Commercial and investment banking were able to cross the invisible divide and create an intricate network filled with conflicts of interest, newly created classes of securities, and institutions that became “too big to fail”. With their rapid growth the SEC and other regulators were unable to keep up with the changing landscape. Conflicts of interest began to form within the regulatory and rating agencies which further reduced the objectivity and accountability of the industry. It was only a matter of time before another downturn would hit and the bubble would burst causing one of the worst financial catastrophes we have seen in eighty years.

    Senator John McCain and Senator Maria Cantwell in 2009 proposed legislation similar to the original Glass-Steagall Act that would reinstate the separation between commercial and investment banking. However, fierce opposition from banks who would be directly affected by the legislation effectively nixed any chance the bill had for passage.

    The Dodd-Frank Act was an attempt to place additional protections for consumers, but not enough for adequate protection. It also failed to cut the size of institutions, which is the major factor in the crisis.

    In Europe, stricter regulations are being called for in light of the global crisis and legislation is being constructed based on the original Glass-Steagall Act. This is significant because one of the original reasons for repeal is other countries’ ability to run their institutions without these restrictions

    read more Should We Re-enact Glass-Steagall? - Chicago Civil Rights | Examiner.com
     
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  2. Claudette
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    Claudette Gold Member

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    Yes.
     
  3. MikeK
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    MikeK Gold Member

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    yes!
     
  4. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    Yes!!
     
  5. whitehall
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    whitehall Gold Member

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    Say what? "Cut the size of institutions"? You mean government control of corporations? Can you spell fascism?
     
  6. Quantum Windbag
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    Quantum Windbag Gold Member

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    Three voices calling for less regulation in the financial sector.

    My guess is that one of them at least doesn't know that is what they are doing.
     
  7. theDoctorisIn
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    theDoctorisIn Senior Mod Staff Member Senior USMB Moderator

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    I think perhaps you didn't read the OP very carefully.

    Re-enacting Glass-Steagall isn't less regulation.
     
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  8. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    Yes.

    Glass-Steagall kept Deposit Banks and Investment Banks separate. Without it, banks were able to gamble with depositors money and that's what led to the Toxic Derivatives Scam.

    Separate them back out and let the investment banks sink or swim on their own without Gov't bailouts.
     
  9. Quantum Windbag
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    Quantum Windbag Gold Member

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    Apparently you think (mistankenly) that Dodd-Frank is less restrictive than Glass-Steagal.
     
    Last edited: Sep 12, 2011
  10. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    It's a lot less restrictive and does very little about "Dark Pools".
     

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