Remembering the Glass-Steagall Act

[nat4900]

There are various threads on here that, depending on one's partisanship, place the blame for the economy's weaknesses on either GWB or Obama. I believe that much of the blame falls on what happened 16 years ago.

In 1933, in the wake of the 1929 stock market crash, two members of Congress put their names on what is known today as the Glass-Steagall Act. This act separated investment from commercial banking. At the time, "improper banking activity," or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.

The financial crisis of 2008 might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.

In 1999, led by President Bill Clinton and Republican Sen. Phil Gramm joined forces to repeal Glass-Steagall at the behest of the big banks. What happened over the next eight years was an almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and once again they sold them to their customers in the form of securities. The bubble peaked in 2007 and collapsed in 2008. The hard-earned knowledge of 1933 had been lost in the arrogance of 1999.

So here are the questions:

1. Should the Glass-Steagall Act be reinstated? If no, why not?
   
   
2. Would this Act be more likely to be reinstated by a Dem…..or GOP WH and Congress?
   
   
3. Should the endorsement or rejection of the Act reinstatement be a direct question posed to EACH of the candidates for the WH in 2016?
   

 

[hipeter924]

1. It would have to be rewritten and some parts added/removed, and it wouldn't pass if you keep the same name.

2. It would have be a bi-partisan bill, with lots of special clauses, as you couldn't get it passed by each party alone.

3. The WH candidates and the media covering debates and so forth are in the deregulator's pocket, excluding perhaps Warren (if she were to run) and Rand Paul. So a public endorsement simply isn't possible.

 

[The Rabbi]

Glass Stgeagell did nothing to prevent the S&L crisis or the SOuth American debt crisis. It would not have prevented the mortgage meltdown either. Another impediment to banks making money. Good riddance.

 

[Mac1958]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

 

[The Rabbi]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

 

[occupied]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

Glass-Steagal was repealed expressly because it prevented Citibank from merging with Travelers. It didn't just keep banks from risking consumer deposits to play in the stock market, it also prevented banks from being in the insurance business.

 

[Claudette]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

Glass-Steagall should be reinstated.

 

[CowboyTed]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

Look how Rabbi is going to try and make the banking crisis the liberals fault...

If a tree falls in a forest.... , he is pretty sure a liberal did it..

 

[nat4900]

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

Well stated......If media outlets and pundits (the o-called, 5th estate) want to show some measure of "independence" from big corporations, the question on this issue should be asked of every candidate,

 

[hipeter924]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

Glass-Steagal was repealed expressly because it prevented Citibank from merging with Travelers. It didn't just keep banks from risking consumer deposits to play in the stock market, it also prevented banks from being in the insurance business.

Don't claim for pot holes with Travelers, they raise your premium when the policy comes up for renewal, and claim you had a 'major accident' and that you are a bad driver. If it wasn't for AAA, Travelers would have totally screwed things over. Travelers is a horrible company, if you claim in areas they don't like.

Looks like Citi's plan for global 'plutonomy' isn't going so well: http://www.economist.com/news/finan...al-banking-network-difficult-it-alluring-citi

The assumption under the current boss, Michael Corbat, is precisely the opposite. But working out how Citigroup makes its money—and therefore which parts of the business are most dispensable—is just as vexing. In total, Mr Corbat reckons 60 businesses have been sold since the crisis. Among them are brokerage arms in America and Japan, a student-loan operation and some credit-card units. The most visible contraction has been in Citi’s consumer business, which is shrinking from 50 countries to 24, and in America, from 14 cities to seven. This week, Citi announced the sale of OneMain Financial, a subsidiary that makes high-interest consumer loans, and a stake in Akbank, a Turkish lender.

 

[g5000]

Glass-Steagall was not a direct cause of the crash. It certainly amplified it, but it was not a primary agent. Point of fact, Lehman Brothers and Bear Stearns and Goldman Sachs, et al. were nonbank firms.

And Glass-Steagall was pretty much a dead issue by 1999. It had been greatly eroded in the 1980s, and Gramm-Leach-Bliley was just the final cut.

No, you have to look at the big picture. It was the entire deregulatory environment which contributed to the crash, not just the death of Glass-Steagall. It was the bogus belief that banks would regulate themselves which was the fatal flaw.

 

[g5000]

The banks are no longer Too Big To Fail. They are beyond that now.

They are Too Big To Save.

 

[The Rabbi]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

Glass-Steagal was repealed expressly because it prevented Citibank from merging with Travelers. It didn't just keep banks from risking consumer deposits to play in the stock market, it also prevented banks from being in the insurance business.

Link?

 

[The Rabbi]

1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.

2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.

3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.

.

G-S had absolutely, literally, zero to do with too big to fail. Citibank, the poster child for too big to fail, grew up under Glass Steagell and was bailed out twice before this last time.
We dont need GS. We dont need Dodd Frank either.

Look how Rabbi is going to try and make the banking crisis the liberals fault...

If a tree falls in a forest.... , he is pretty sure a liberal did it..

Do you see the word "liberal" anywhere in my post?
No, of course not. Now go stuff it.

 

[The Rabbi]

Glass-Steagall was not a direct cause of the crash. It certainly amplified it, but it was not a primary agent. Point of fact, Lehman Brothers and Bear Stearns and Goldman Sachs, et al. were nonbank firms.

And Glass-Steagall was pretty much a dead issue by 1999. It had been greatly eroded in the 1980s, and Gramm-Leach-Bliley was just the final cut.

No, you have to look at the big picture. It was the entire deregulatory environment which contributed to the crash, not just the death of Glass-Steagall. It was the bogus belief that banks would regulate themselves which was the fatal flaw.

Banks were more regulated in 2006 than they were in 2000. So this whole "deregulation" thing is simply bogus crap dreamed up by liberals as an excuse to take over banks.

 

[hipeter924]

Glass-Steagall was not a direct cause of the crash. It certainly amplified it, but it was not a primary agent. Point of fact, Lehman Brothers and Bear Stearns and Goldman Sachs, et al. were nonbank firms.

And Glass-Steagall was pretty much a dead issue by 1999. It had been greatly eroded in the 1980s, and Gramm-Leach-Bliley was just the final cut.

No, you have to look at the big picture. It was the entire deregulatory environment which contributed to the crash, not just the death of Glass-Steagall. It was the bogus belief that banks would regulate themselves which was the fatal flaw.

It was also bad spending habits created by regulators and banks. Credit scores and the credit rating system are Keynesian and anti-saving, and are used by the banks and retailers to stop people buying in cash or using savings instead of credit. This is disastrous because in order to have a stable monetary system, the majority of consumers should have more savings than debt, but the system right now actually punishes people for saving their money.

 

[The Rabbi]

The banks are no longer Too Big To Fail. They are beyond that now.

They are Too Big To Save.

Is that supposed to mean something? Because it doesn.t.

 

[The Rabbi]

Glass-Steagall was not a direct cause of the crash. It certainly amplified it, but it was not a primary agent. Point of fact, Lehman Brothers and Bear Stearns and Goldman Sachs, et al. were nonbank firms.

And Glass-Steagall was pretty much a dead issue by 1999. It had been greatly eroded in the 1980s, and Gramm-Leach-Bliley was just the final cut.

No, you have to look at the big picture. It was the entire deregulatory environment which contributed to the crash, not just the death of Glass-Steagall. It was the bogus belief that banks would regulate themselves which was the fatal flaw.

It was also bad spending habits created by regulators and banks. Credit scores and the credit rating system are Keynesian and anti-saving, and are used by the banks and retailers to stop people buying in cash or using savings instead of credit. This is disastrous because in order to have a stable monetary system, the majority of consumers should have more savings than debt, but the system right now actually punishes people for saving their money.

That was literally the most ignorant post I've read on here. Credit scores are Keynesian? Seriously? Where do they teach this crap?

 

[g5000]

The banks are no longer Too Big To Fail. They are beyond that now.

They are Too Big To Save.

Is that supposed to mean something? Because it doesn.t.

It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.

 

[Toddsterpatriot]

There are various threads on here that, depending on one's partisanship, place the blame for the economy's weaknesses on either GWB or Obama. I believe that much of the blame falls on what happened 16 years ago.

In 1933, in the wake of the 1929 stock market crash, two members of Congress put their names on what is known today as the Glass-Steagall Act. This act separated investment from commercial banking. At the time, "improper banking activity," or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.

The financial crisis of 2008 might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.

In 1999, led by President Bill Clinton and Republican Sen. Phil Gramm joined forces to repeal Glass-Steagall at the behest of the big banks. What happened over the next eight years was an almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and once again they sold them to their customers in the form of securities. The bubble peaked in 2007 and collapsed in 2008. The hard-earned knowledge of 1933 had been lost in the arrogance of 1999.

So here are the questions:

1. Should the Glass-Steagall Act be reinstated? If no, why not?
   
   
2. Would this Act be more likely to be reinstated by a Dem…..or GOP WH and Congress?
   
   
3. Should the endorsement or rejection of the Act reinstatement be a direct question posed to EACH of the candidates for the WH in 2016?

How would Glass-Steagall have prevented banks from writing or buying crappy mortgages?