There are two laws known as Glass-Steagall Act. The first established the FDIC. The second separated banking types to keep banks from dabbling in different kinds of banking.
The second Glass-Steagall Act was repealed in 1999 when it was signed into law by President Clinton.
”Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” Treasury Secretary Lawrence H. Summers said. ”This historic legislation will better enable American companies to compete in the new economy.”
Larry Summers was the Treasury Secretary, the same job Tim “Turbo Tax” Geithner has now, when the law was repealed. He is now the Director of the National Economic Council and Assistant to the President for Economic Policy under President Obama.
Change you can believe in certainly seems to be the same old business as usual.
The 1999 New York Times article was full of warning against repealing Glass-Steagall.
”Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,” Mr. Wellstone said. ”Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.”
Notice who counters the warning:
”If we don’t pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,” said Senator Charles E. Schumer, Democrat of New York. ”There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.”
Schumer is leading the government interference. He is the one clamoring over the banking industry’s arrogance. He is the one who voted for an unprecedented stimulus package without having read the bill and then feigned surprise when he found out it hurt his constiuents. Schumer is the one who said American taxpayers care not a hoot about pork in government spending.
This was not a Democrat-only bill that got pushed through. It was actually a minority Republican Congress that wrote the repeal of Glass-Steagall. With the help of the Democratic majority, Congress got this passed.
The hypocrisy of our lawmakers seems to know no bounds. Glass-Steagall was the protection to the American taxpayer that banks do not dabble in too many banking industries. It was what kept AIG from doing derivatives.
Hold these guys responsible, dear reader. The snow job they are engaged in is massive. These are the same folks who are pitching to take control of not only the banking industry, but any business it deems “needs government help”. Yikes! I am unwilling to give these folks that kind of power.
Well, leave it to Charles Schumer to ask for regulations on day trading. My goodness, nothing can ever happen without some law being proposed to stop it? It is not enough that the guy in Atlanta killed all those people. Of course, had we had a law about day trading, it would never have happened.
I am tired of this. Can’t we just accept that there are stupid people and there is no regulating stupidity?