Let's make banking boring again!

They say that politics makes strange bedfellows, and apparently, that saying holds true for economics. Senators Elizabeth Warren and John McCain have joined forces in the fight to make banking boring again.

Last week, the progressive senator from Massachusetts teamed up with the far-right conservative from Arizona to introduce legislation that would reinstate the Glass-Steagall Act.

That bill was originally enacted in 1933 to separate commercial banking and investment banking, and prevent Wall Street from gambling with the federally-backed deposits of everyday Americans. That law was quite successful until it's repeal during the Clinton Administration, when then-Senator Byron Dorgan warned us of the inevitable damage that would be caused by allowing Wall Street to blur the lines between banking and making risky investments.

Senator Dorgan said, “I think we will look back in 10 years' time and say we should not have done this, but we did because we forgot the lessons of the past and that that which is true in 1930s is true in 2010.”

And, just about 10 years after that statement, the too-big-to-fail banks crashed our economy and held out their hands for a bail out.

Thankfully, Senators Warren, McCain, and others are working to undo some of that damage and reinstate the law that helped keep Wall Street in check. According to Senator Warren, the bottom line is that “Despite the progress we've made since 2008, the biggest banks continue to threaten our economy.”

It only took banks a decade to remind us why we needed these important regulations, yet we've barely held these too-big-to-fail banks responsible for their crimes. Reinstating Glass-Steagall could be a monumental step towards protecting our economy and turning banking back into the safe, boring profession that it should be.

Call your Senators today and tell them to support the re-instatement of Glass-Steagall.

Comments

Hephaestus's picture
Hephaestus 7 years 36 weeks ago
#1

We need to do away with private banks and their usury

If anyone has the testicular fortitude and bottle to do it is very doubtful

Sadly, those that tried in the past were assasinated it seems

Therein lies the story of our current predicament

For example - who are screwng Greece?

Craig Ziegler's picture
Craig Ziegler 7 years 36 weeks ago
#2

Okay, so Clinton and Phil Grahm worked to remove long standing banking regulation, intended to prevent regular banks from exploring risky investments. Now the banking industry changes did create a lot of interesting new formats. Zero interest loans for first time home buyers directed at young first time new family home buyers......theory being they were going to make interest only payments, and ultimately be required to make a ballon payment, which everyone knew going it they could never manage. But, since they would be paying rent, above $1,400 to $1,800 per month, that money gone, why not do the same thing on an interest only loan, and then in the meantime the equity would improve, so several years out they could sell the house, take the left over equity and actually make a old fashioned 20% down home purchase, using a conventional loan, without the ballon short term payment. And there were some other twists to this scenario. Enter the real estate industry and recently deregulated banking enthusiasts, world wide even. So, in 1999, when this formal change takes place, roughly, the banking industry was essentially paddling in to catch the wave..........the real estate industry, and all related sports, which I will mention momentarily, were already riding the wave. The residental real estate industry was bombing. There were builders, every stripe of subcontractor, private home loan vendors, institutional loan services, property apprasiers (commerical and residential), development companies (typically comprised of a builder or two, an architect or two, some real estate dealers, at least one of which would be a real estate broker, maybe a money guy, and an attorney or two), property inspectors (for supporting loan apprasial values), and a supporting cast of service related businesses, such as, engineering firms signing off on building designs developing more costs and values. The list goes on and on depending on how meticulous you want to be in your analysis. Now here is the deal........none of this group was suppose to take advantage of these zero interest loans, and other motivating loan schemes, backed by federal programs intending to extend a helpful hand to low income first time home buyers. Why not, made perfect sense, take advantage of the home equity markets, you couldn't lose. Now this industry activity was not just taking place within the context of individual home building, custom home building, or general residential district development, but also within the corrollary world of home remodeling, thus the emergence of the do it your self home improvement world, including the super market service stores offering one stop shopping for all your remodel needs, not to mention the burgeoning lumber yard tools and nails service industry that was blooming as well. Everyone was getting in the game.......the guys behind tghe counter at the lumber store. the in home loan venders writting sketchy home loan packages for home buyers a bank couldn't touch.......and this was all long long before 1999 and Clinton and Grahm decided to help out. Now here is the deal, as time went on, more and more, shall we call them industry insiders, participants began to understand and realize just how loose the new enthusiasm for home loans was becoming. We learned that to secure a home loan you didn't have to actually use the 1040 form you filed with the IRS that year, no one checked, and frankly they didn't care. You could check the box "Primary Residence", no one cared, no one checked............everyone was making way to much money and way to busy to bother with checking anything. So I mean whats a realator to do........I suppose its possible that I could secure this loan, on this new property, as primary residence, what the hell, having two or three or a dozen zero interest loans, as a low income individual........well I am going to remodel the property, or actually sell it to a nice young family, with a newborn, that needs a house like this and they could remodel it and make hundreds of thousands of dollars, I will just take a small profit, and tie up a small stable of homes, in this exceptionally hot residential sector of Any Town USA. As for selling a home..........well Juan here needs a home, he works concrete all day, everyday, obviously he can afford it, and we can submit a 1040 that would look like what Juan would submit if he did submit, he is paying taxes and social security, as Juan martinez Lopez hernandez, we will just leave out a few names and say go as Juan Lopez, social security number, you pick 344-12-3545, Social Security will let us know if we got it wrong and we can correct it later............Are you beginning to get the idea here........this was the game the banking industry walked into in 1999........they didn't start it.......The US does not have even close to enough prisons and prison cells to house all the tax paying citizens of the realm that were stealing hundreds and hundreds of thousands of dollars using subtle variations of real estate, tax and banking loan fraud..............long long long before Wall Street caught on. Just like with drug dealing if there were enough layers to the transaction it was difficult to digest, understand, and bottom line everyone simply offered to make a correction............what don't you like about the 1040 form for Juan Lopez...........is he legal I think he is legal, I am sure he is legal, oh the name is incomplete, it is actually Juan Martinez Lopez, and that last number in the social security has been transposed according to Juan...........later that day, the realator lets Juan know........"hey Juan, the loan went through just like I said, you own the hose", Juan says, "but senior I am illegal how can this be?", the realator says, never mind that how about Hector there, does he need a house, and Juan, you are making enough money, how about a couple of rentals..............you catching on yet. The poor bastard illegals, and every other low income homo sapian variation you can think of, was offered a shot some took it of their own voliition, some had it force fed to them, and some were gathering up booty like it was an easter egg hunt. North to South, East to West, coast to coast.........for once all the everyday, mostly working stiffs, were raping the resource as best they could, and they could do just fine. Turns out you didn't need to be a Harvard Grad to know down a few million, playing some bizarre shell game at Merril Lynch, you could do just fine in residential reat estate Any Town USA. Until Wall Street did happen to notice all these run of the mill real estate people making 7 figure incomes, then they got interested........that was about the time of deregulation and beyond...........so how many prison cells would you need to incarcerate all these people, every city had them bending and breaking the rules, committing fraud and defrauding federal programs designed, or intended, to help less fortunate individuals of our society get started...........there were 100's of people participating in a small town, 1,000's of realators, apprasiers, builders, loan venders, etc in a larger town, 10's of 1,000's in a large town........all good citizens, well not exact citizens, we shall say the current edition, not exactly vetted you might say..........doing it the American way...........and you honestly think these band of thieves and cutthroats is capable of any rational intelligent choice at any level........I know the billionares, I know the millionares...........I have guided them at exslusive ultra elite fishing lodges forever, nice people, just like all the realators,etc...........but they are Americans, the current version, what they do is steal, you invent the game, you state the rules, and they seek to subvert it............the goal being to make money. Making money is the soul, and the sole activity these modern day citizens are interested in........that is all, nothing more nothing less............anything else is just a hand maiden at best, frills, the trappings of, the accoutrements of the American way now.............Cudo's to you and Bernie for your genuine heartfelt interest and concern, but it is falling on deft ears my friend. You want to meet the people that would have cared, that would have steered a worthy course, and taken all the noble savages with them, then visit the Redwoods, out back, right out in the trees, living quietly waiting for death,patiently, and then onto the next manifestation.........but this is done. Greed and greed alone is what's left now. The muslim myth is just another outcry, another manifestation of the intelligences plee for enlightenment, but enlightenment can't come to so many so far from the truth, so misguided by the underlying assumptions of the prupose of their existence and the acceptance of the virtue of the choice as manifest in the materialization of money. Money makes them noble, money means that God has chosen them..........they are elect..........it has been devinded, or my bomb would not have found its mark and on and on it goes..........but I hope you continue the the last, you and Bernie.........I am right with you, although I am voting for Hillary...........at this point I think the optimum credential is black, gay, indegent, female is an absolute must, so Hillary is one of those at least..........anything, as we descent into eternal fires of squandered opportunity, but another fat, gray haired, white guy.........you see we lack historical perspective.......the US has existed but a flash in the pan of civilzation, a mear spark of combusting grease jumping from the pan into that fire of humanity...........and not that long ago we were advised that this system of democracy could not possible prevail, as Plato advised, "you cannot put the individuals of political power in charge of the purse strings........there is but one outcome to that choice..........they will ultimately award themselves lavish wealth at the expense of the republics investment"...........and a mear two hundred years later we have established a systme by which politicians empower themselves by awarding high paying civil service, blantantly employing nepotism or any other substandard criteria, but never credential, to secure for themselves ever higher and greater benefit, cemented by the cronyism and favoritism of their respective political benefactor(s).......greed prevails at every turn, and the democratic experiment, the extraordinary republic, was stolen, stolen in broad daylight, and the populous ran in mass to this slaughter, where is mine where is mine they cried, and they all received their just reward..........wierdly enough, that may very well turn out to be some arcane twist in the saga religious fundamentalism, be it muslim or christian, shouldn't make much difference really. But again, Cudos to you guys............and remember, there is a chance, there is always a chance..........I mean seems pretty obvious that this is as bad as it can get..........there you can see it, at so many levels, the ultimate brass ring, a fair and just society, its right there, can't they see it, its such a clear thing, such a solid possibility............so simple..........but so so evasive............stiill if you don't quit, I won't guit........good luck Craig

2950-10K's picture
2950-10K 7 years 36 weeks ago
#3

Regulate the Fascists on Wall Street???? We can't even get the Republicans to stop giving tax breaks to the Fascists shipping our jobs overseas. Now our President has teamed up with the Republicans in support of the private interests that both own and control them.....more free/slave trade.

Let's face it....big money and their media whores have far more power than, "We the People," and doing the right thing for the 99% ain't gonna happen until we have a full scale political revolution.

Hermit1's picture
Hermit1 7 years 36 weeks ago
#4

I'm from the UK and no expert in global financial matters but my understanding is that the whole system is a scam because these big banks are actually insured against losses. So when everything went belly up for taxpayers around the globe they didn't actually lose a penny PLUS they got access to all the quantative easing made available by governments at next to zero interest rates. This would explain why they seem to be able to easily pay all the multibillion fines for fixing LIBOR, fixing foreign currencies etc. etc.

What's happening in Greece with the EU at the moment is symptomatic of the fact that every country globally is in such debt (that can never be repaid) that the monetary system/economics is totally unsustainable. There are much cleverer people than me who have written books demonstrating that humans don't need money to run the planet and ensure everyone is fed and housed.

tom kauser 7 years 36 weeks ago
#5

your concept of boring should be explored further. I dont believe it can be any more boring. Each hour of my labor is stolen by the Federal Reserve in the form of a unlimited term loan which is hoarded on the "public" balance sheet to be used to deliver rents to vactioning Europeans? or to allow Europe to feed the red haired step child in athens for a couple more years? BEEN TALKING HIGHER SHORT RATES EVERYDAY SINCE THEY USED SHORT RATES TO DESTROY HOUSING OR grandma Yellen is locked in the wish to go back not 70 years just 7 OR 8?

dianhow 7 years 36 weeks ago
#6

Way too long ... Former Sen Phil Gramm & lobbyist wife made 900 K off the Enron scandal . Graham helped push thru crook Ken Lays ' Enron loophole ' That made it easy to manipulate CAlifornias energy markets - causing multiple ' energy outages / blackouts ' Gramm's wife & Enron made many millions. ) Prosecuted ) Ken Lay was one of Bushs pals & energy advisor ! Gramm like Tom Delay ,Cheney , many other corrupt politicians ( and Wall St massive banks ) screwed taxpayers & investors royal. Leading to deep depression- global 2008 crash . years of wealth favoring anti middle class anti workers -anti fair wage policies & laws brought US to our knees Yet millions of far right voters have forgotten GOP ' leaders' are keeping their Jan 2009 vow to ' Block anything Obama does even when good for our country ! I find them despicatable.

BuenSabor 7 years 35 weeks ago
#7

I just gotta say, it's a damned good thing I don't believe in paying my bills.

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