The one bill that could've stopped this economic mess

Discussion in 'Congress' started by DavidS, Sep 21, 2008.

  1. DavidS
    Offline

    DavidS Anti-Tea Party Member

    Joined:
    Sep 7, 2008
    Messages:
    9,811
    Thanks Received:
    766
    Trophy Points:
    48
    Location:
    New York, NY
    Ratings:
    +767
    Was partially repealed in 1999.

    Officially named the Banking Act of 1935, it 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. It was passed June 16, 1933.

    During the dot-com bubbe of the 1990s, lobbyists for mortgage and investment banking companies, lobbied congress to repeal this act so s&l banks could sell sub-prime mortgages to investment banks.

    In 1999, the United States Congress officially passed a bill that repealed this act.

    The three congressmen who sponsored this bill are:

    In the United States House of Representatives

    Thomas J. Blilely - Thomas J. Bliley, Jr. - Wikipedia, the free encyclopedia.
    Jim Leach - Jim Leach - Wikipedia, the free encyclopedia

    In the United States Senate

    Phil Gramm - Phil Gramm - Wikipedia, the free encyclopedia

    This bill became known as the Gramm-Leach-Bliley Act. Bill Clinton signed this into law in 1999.

    Gramm-Leach-Bliley Act - Wikipedia, the free encyclopedia

    If this bill had not been passed, we wouldn't have had the Housing Bubble and we wouldn't be where we are today with the government spending 1 trillion dollars on bailing us out.

    Oh, by the way, some of you might recognize one of those names. Phil Gramm. This is the "gentleman" and I use quotes in that because he really isn't one, who called America a bunch of whiners. He was also, up until July, the top economic advisor to presidential candidate John McCain (R). Although he stepped down in July, he is still an unofficial advisor to McCain on economic issues. So when you heard earlier last week, from McCain, that our economy was fundamentally strong, that was because Gramm is trying to cover his tracks for being partially responsibile for this mess.
     
    • Thank You! Thank You! x 1
  2. Chris
    Offline

    Chris Gold Member

    Joined:
    May 30, 2008
    Messages:
    23,154
    Thanks Received:
    1,958
    Trophy Points:
    205
    Location:
    Virginia
    Ratings:
    +2,089
    This is big part of the story.....

    John McCain's Gramm Gamble by Patricia Kilday Hart - The Texas Observer

    In the early evening of Friday, December 15, 2000, with Christmas break only hours away, the U.S. Senate rushed to pass an essential, 11,000-page government reauthorization bill. In what one legal textbook would later call “a stunning departure from normal legislative practice,” the Senate tacked on a complex, 262-page amendment at the urging of Texas Sen. Phil Gramm.

    There was little debate on the floor. According to the Congressional Record, Gramm promised that the amendment—also known as the Commodity Futures Modernization Act—along with other landmark legislation he had authored, would usher in a new era for the U.S. financial services industry.

    “The work of this Congress will be seen as a watershed where we turned away from an outmoded Depression-era approach to financial regulation and adopted a framework that will position our financial services industry to be world leaders into the new century,” Gramm said.

    Watershed indeed. With the U.S. economy now battered by a tsunami of mortgage foreclosures, the $30-billion Bear Stearns Companies bailout and spiking food and energy prices, many congressional leaders and Wall Street analysts are questioning the wisdom of the radical deregulation launched by Gramm’s legislative package. Financial wizard Warren Buffett has labeled the risky new investment instruments Gramm unleashed “financial weapons of mass destruction.” They have fed the subprime mortgage crisis like an accelerant. While his distracted peers probably finalized their Christmas gift lists, Gramm created what Wall Street analysts now refer to as the “shadow banking system,” an industry that operates outside any government oversight, but, as witnessed by the Bear Stearns debacle, requiring rescue by taxpayers to avert a national economic catastrophe.
     
    Last edited: Sep 21, 2008
  3. dilloduck
    Offline

    dilloduck Diamond Member

    Joined:
    May 8, 2004
    Messages:
    53,240
    Thanks Received:
    5,552
    Trophy Points:
    1,850
    Location:
    Austin, TX
    Ratings:
    +6,403
    Let's string him up. It's obvious isn't it ?
     
  4. Chris
    Offline

    Chris Gold Member

    Joined:
    May 30, 2008
    Messages:
    23,154
    Thanks Received:
    1,958
    Trophy Points:
    205
    Location:
    Virginia
    Ratings:
    +2,089
    No, give him the Medal of Freedom......

    [​IMG]
     
  5. plt42
    Offline

    plt42 A Constitutionalist

    Joined:
    Sep 3, 2008
    Messages:
    303
    Thanks Received:
    40
    Trophy Points:
    16
    Location:
    Gulf Coast of Texas
    Ratings:
    +40
    If I remember correctly, a couple of years into the GSA, Glass himself wasn't too sure it was a good move. Supposedly separating the type of business the banks did, commercial or investment, was going to decrease risk but indeed had the opposite affect. (My first economics class was a bazillion years ago.) Of course, total deregulation obviously wasn't a good choice either.
     
  6. xsited1
    Offline

    xsited1 Agent P

    Joined:
    Sep 15, 2008
    Messages:
    17,750
    Thanks Received:
    5,299
    Trophy Points:
    198
    Location:
    Little Rock, AR
    Ratings:
    +5,306
    Without forcing a veto vote, this bipartisan, veto proof legislation was signed into law by President Bill Clinton on November 12, 1999.
     
  7. DavidS
    Offline

    DavidS Anti-Tea Party Member

    Joined:
    Sep 7, 2008
    Messages:
    9,811
    Thanks Received:
    766
    Trophy Points:
    48
    Location:
    New York, NY
    Ratings:
    +767
    Every single economic crisis in the history of the United States where banks have gone under, has been linked to de-regulation. This isn't an opinion, this is a fact. Do your history: The panics of 1819, 1837, 1857, 1873, The First Great Depression (the Long Depression), The Panic of 18973, The Second Great Depression The Great Depression, the S&L crisis of the late 1980s, early 1990s, and today's crisis.

    While I am a conservative, I realize that like other freedoms, I am not TOTALLY free. For instance, I have freedom of speech, but I cannot walk up to the secret service and tell them I have plans to assisnate the president. I cannot yell on an airplane that I'm going to hijack the plane. I cannot commit murder, I cannot steel, I cannot do a whole slew of things. I am not 100% free, I do have government regulation on my freedom. To have TRUE freedom, we would need to exist in an anarchist society where there are NO rules. Just HOW free I am, is a debate that lawyers and philosophers have every day.

    The banking industry is the same way -- each bank should exist as private corporations that borrow from the federal government and are partially regulated by the federal government. Just HOW free banks are, is a debate that Congress, Bush and the Treasury Secretary are having right now.
     
    • Thank You! Thank You! x 1
  8. Mad Scientist
    Offline

    Mad Scientist Deplorable Gold Supporting Member Supporting Member

    Joined:
    Sep 15, 2008
    Messages:
    23,940
    Thanks Received:
    5,211
    Trophy Points:
    270
    Ratings:
    +7,680
    Well that why our forefathers didn't want a central bank wasn't it? They knew something like this could happen.

    Well technically that's not "freedom of speech" that's "communicating a threat".
    I'm thinking you're confusing "freedom" with "anarchy" no?
     
  9. rayboyusmc
    Offline

    rayboyusmc Senior Member

    Joined:
    Jan 2, 2008
    Messages:
    4,015
    Thanks Received:
    338
    Trophy Points:
    48
    Location:
    Florida
    Ratings:
    +338
    They regulate the little people, they also need to regulate the big people. The big difference is that most often they go free with their millions.

    They aren't any more honest than us little folks. Their greed lead to this crisis. And now I am reading economists who are saying this might work for two or three weeks before we are back in the poop pile.
     

Share This Page