Today they will announce the fix that will fix the fix that didn’t fix anything.
WASHINGTON (CNNMoney.com) — The head of a key banking panel is expected Monday to release a draft bill of sweeping regulatory changes aimed at warding off future collapses in the financial system.
Been there, did that 77 years ago: Carter Glass and Henry B. Steagall- The Glass-Steagall Banking Act.
Worked fine and kept America on balance through all of those many years after the Great Depression. Savings and loan banks were kept separate from commercial and investment banks. Yet, some in the financial business thought that those ‘regulations‘ were too binding, too restrictive, and that stifled ‘business.’
The typical cry that one gets from the right-wing about regulations hurting the growth of corporate interests caused the repeal of many of the provisions of Glass-Steagall in 1999. Signed by Clinton, the Gramm-Leach-Bliley Act permitted opening up the market among banking companies, securities companies and insurance companies.
Naturally, in order to scam the citizens, Gramm-Leach-Bliley was sold to them [and their representatives in Congress] with the fancy name of the Financial Services Modernization Act. Modernization. Nice word for deregulation. Deadly consequences.
The dumbed-down citizens along with equally dopey legislators thought that the stogy 66-year-old bill was out of date and inhibited market speculation and personal financial aggrandizement. Gramm-Leach-Bliley was cheered as the new hope for wide-spread financial reward.
In its 2008 coverage of the financial crisis, The Washington Post named Phil Gramm one of seven “Key Players In the Battle Over Regulating Derivatives”, for having “pushed through several major bills to deregulate the banking and investment industries, including the 1999 Gramm-Leach-Bliley act. As with any crook caught red-handed, Gramm responded to criticism of the act by stating that he saw “no evidence whatsoever” that the sub-prime mortgage crisis was caused in any way “by allowing banks and securities companies and insurance companies to compete against each other.”
Senator Phil Gramm currently is employed by UBS AG as a Vice Chairman of the Investment Bank division. Isn’t that all nice and cozy?
Gramm may have been a driving force in electing Obama because, as senior economic advisor to the McCain’Palin Election Campaign, Gramm explained that the nation was not in a recession, stating, “You’ve heard of mental depression; this is a mental recession.” He added, “We have sort of become a nation of whiners, you just hear this constant whining, complaining about a loss of competitiveness, America in decline.”
So today, Democratic senator Dodd will attempt to fix the fix. Dodd said Thursday that the “single most important thing we do in this bill” will be creating a new mechanism to prevent firms from becoming so big that their failure would threaten the entire financial system, spurring another universally hated $700 billion Troubled Asset Relief Program.
Oh really? Dodd was one of the 90 ‘yes’ votes that passed Gramm-Leach-Bliley. Seven Democrats and one Republican [Shelby] voted ‘no.’
Now Dodd wants to ‘change’ his vote, so to speak, after the horse has left the barn.
Does the word stupid come to mind?
By the way, it will not be a grand, sweeping reform as the citizens might expect. Rather, some provisions will remain intact to appease the right-wing. After all, we must always be appeasers even tough the Republicans on the panel want to slow things down. In a Friday letter, they said the Dodd timetable wouldn’t allow enough time for lawmakers to “fully understand the details of your new legislative proposal,” according to the letter signed by all 10 Republicans on the committee.
Too fast. Too many pages. Ram it through.
When will the citizens wake up? Perhaps never.
HERE is the story and the plan