NY Times on Calls to Reinstate Glass-Steagall Act: Meh

Restore Glass-Steagall

This post is for frequent commenter Robert “LaRouchie” Lauten, who will spit into the wind his insistence that the re-instatment of the Glass Stegall act which provides tighter regulation of banks and large financial institutions is the cure-all for what ailes the economy.  The New York Times says “not so fast.”

From the story in Tuesday’s edition of the Gray Lady:

A meme around Glass-Steagall has been created, repeated so often that it has almost become conventional wisdom: the repeal of Glass-Steagall led to the financial crisis of 2008. And, the thinking goes, has become almost religious for some people, that if the law were reinstated, we would avoid the next crisis.

The facts — basic facts — just aren’t that convenient. While the repeal of Glass-Steagall has seemingly become the sine qua non of the financial crisis, it is pure historical revisionism.

Bringing back something akin to Glass-Steagall would clearly help limit risk in the system. And that’s a very good and worthy goal. Letting banks sell securities and insurance products and services allowed them to grow too big too fast, and fueled a culture that put profit and pay over prudence.

But here’s the key: Glass-Steagall wouldn’t have prevented the last financial crisis. And it probably wouldn’t have prevented JPMorgan’s $2 billion-plus trading loss. The loss occurred on the commercial side of the bank, not at the investment bank. But parts of the bet were made with synthetic credit derivatives — something that George Bailey in “It’s a Wonderful Life” would never have touched.

For the free market to function best, it needs to follow a set of rules.  Too often, conservatives and those wacky Libertarians at the OC Register’s editorial desk, confuse the concept of “freedom” by suggestion rules to monitor and manage the “freee market” are a threat to freedom.  Yet every time another long standing policy is de-regulated, we run into a problem.

The piece details the why behind those instutions who got the biggest of the bailouts.

  7 comments for “NY Times on Calls to Reinstate Glass-Steagall Act: Meh

  1. May 24, 2012 at 2:29 pm

    The 3 necessary steps for America’s economic recovery and to avoid an economic collapse from which there will be no recovery are the following.

    1A reinstate Glass-Steagall which is to declare the worthless speculative activities to be a factitious debt and a factitious asset.
    1B reestablish the Hamiltonian Credit System to re-capitalize our banks.
    1C Start the 1960’s North American Water and Power Alliance infrastructure project and other economic infrastructure projects that are grand enough to rebuild the physical economy.

    Glass-Steagall is step #1. Absent Glass-Steagall there will be no step 1B, or 1C, and no chance for an economic recovery.

    Your choices are to either both visit my website and watch a video about the 3 steps for economic recovery, – or believe the New York Times, the very organization that was arguing for the repeal of Glass-Steagall in the 1990’s.

    Think it through.
    http://www.robertlautenforussenate2012.com

  2. May 24, 2012 at 7:37 pm

    Let’s Take a Quick Summary Look At Who is AGAINST and who is FOR Glass Steagall and then leave it to the reader to judge for himself or herself.
    AGAINST Glass Steagall
    1.Jaime Dimon, CEO JP Morgan
    2.Brian Moynihan,CEO, Bank of America
    3.Alan Greenspan, Former JP Morgan Executive, Former Federal Reserve Chairman
    4.New York Times/Wall Street Journal/London Economist
    5.Barack Obama, Barney Frank, Phil Gramm,Jim Leach

    FOR Glass Steagall
    1. National AFL-CIO Trade Union Federation, California Federation of Labor, International Association of Machinists, National Federation of Teachers
    2. National Farmers Union, Wisconsin Farmers Union,
    3. League of Latin American United Citizens, Congresswoman Loretta Sanchez, Democrat- Orange County, California
    4. St. Louis Post Dispatch, Pittsburgh Tribune Review, Slt Lake City Tribune
    5. Lyndon LaRouche, Robert Lauten, Cong. Raul Grijalva, and Congressman Keith Ellison, Chairmen Progressive Caucus, US Congress, Congresswoman Maxine Waters, Cong. Barbara Lee, Congressman George Miller, Cong. Marcy Kaptur

    So, l leave it up to the reader to decide.

    • Yeparoo MrMagoo
      May 25, 2012 at 11:00 am

      Gerald,

      If Europe has never had a Glass-Steagall Act, why should the US?

      Please add one more name to the “Against” list: Bill Clinton, it’s his law.

      Think for yourself, lists don’t provide reason.

      • May 25, 2012 at 2:41 pm

        Reply to: Yeparoo MrMaoo from Gerald Pechenuk

        Sir:
        You are “Behind The Times,” in more ways than one.
        Read Bill Clinton’s 2011 Book, “Back To Work.”
        You will find the following: “I made some mistakes too….signing the bill repealing the Glass-Steagall Act.” Case closed.
        Next.

  3. gabriel san roman
    May 26, 2012 at 6:33 pm

    Neoliberals #SMH

  4. gabriel san roman
    May 26, 2012 at 6:37 pm

    Of course, as a regulation, it would not qualify as the be all, end all. That’s a bit of a straw man.

    Too bad Loretta Sanchez and Slick Willy helped dismantle it back in the day…

    Democrats. Meh.

    • May 27, 2012 at 1:31 pm

      Congresswoman Loretta Sanchez has repented for her vote to kill Glass-Steagall in 1999; she is now a cosponsor of HR 1489 http://thomas.loc.gov which will reinstate Glass-Steagall.
      In the US Senate 90 of the 100 Senators voted to kill Glass-Steagall; Senator Dianne Feinstein was one of the 90 that voted to please the Wall Street speculators; she voted to kill Glass-Steagall.

      I’m Robert Lauten the only anti Wall Street speculators candidate of the 24 US Senate candidates.
      The House vote is on my website http://www.robertlautenforussenate2012.com

      There are 62 cosponsors to HR 1489 (58 Democrats and 4 Republicans) in California’s 53 Congressional Districts, 10 Democrat and zero Republican cosponsors. If this LaRouche Republican were to place 2nd in the June 5th Open Primary and especially if Senator Feinstein were to repent and introduce HR 1489 in the US Senate, then things would get really ugly for the Republican Party in California.

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