Glass-Steagall and Deja Vu Politics
Posted in Public Affairs, Money Matters, wordpress, Politics, disclosure, ethics, oversight, Opinion, Congress, Business on February 16th, 2010 by Stanford MatthewsEven though many countries throughout the world largely blame the US for what was called the global financial crisis the greed responsible and regulatory incompetence that enabled excessive risk in financial markets has its roots where most massive failures do; the legislative halls of the US Congress and other such institutions around the planet. Those countries citing the US as responsible for their crippling losses are as guilty as anyone for gladly participating while everything was working out in that house of cards.
International criticism and commentary aside there have been other suggested culprits throughout the long history of actions leading to the economic problems Americans now face. Senator Chris ‘Countrywide’ Dodd as well as sputtering Congressman Barney Frank are but two politicians connected to the banking industry. There are many more who helped themselves to the profits available in the mortgage industry during the run up to disaster and one such person is none other than Rahm Emanuel, President Obama’s Chief of Staff. The President’s choice for Secretary of the Treasury, Timothy Geithner, also has dirt on his hands from his tenure at the Federal Reserve Bank of New York.
During the initial reporting on such matters over the last couple of years the mortgage portion of the crisis included criticism that the Community Reinvestment Act was responsible for much of what happened. It was suggested that financial institutions were forced to extend credit for housing that borrowers were not likely to pay back.
Another culprit receiving criticism in recent years was the Securities and Exchange Commission or SEC. In the past this site featured press releases from the SEC describing the results of legal action against various types of fraud in the financial markets. Almost exclusively the outcome involved what essentially was profit sharing between the offenders and the government. Rather than ever seeing jail time the perps were merely barred from engaging in business in the financial markets and paying some amount of money to the SEC that no doubt came from the ill-gotten gains.
Testimony by former Fed Chair Paul Volcker has focused attention on what may be the single largest reason for problems in banking and Wall Street. The Banking Act of 1933 also known as Glass=Steagall was enacted to avoid problems within the banking industry that occurred then and are remarkably similar to what happened lately. Over the years various parts of the ‘act’ were repealed and some are calling for restoration of those limitations now.
You can do a search on the topic at your favorite engine. You will likely find information about the original safeguards and a repeal history. In addition, HR4375 is a bill sponsored by a Democrat and co=sponsored by nine more plus a Republican. The bill seeks to restore some of Glass-Steagall. Also Senators McCain and Cantwell are in the news claiming to want the same thing or something similar.
This story and the items mentioned above point to the central theme of this post. Political rhetoric and ‘after the fact’ reactions are all too common. It is the evidence that proves what most of us already know about government and those who run it. They govern poorly allowing events to occur that could have been prevented. Where were all these people before the problems referenced here took place? Certainly most of them were in office before the so-called global financial crisis emerged.
The author of this blog supports restoring common sense in government. Like most expressing a personal preference for conservative principles and adhering to our nation’s founding documents Congress and the rest of government is encouraged to concur. And if in this particular case wisdom dictates restoring Glass-Steagall to its original form, please do.
It seems logical to accept the following idea. If the current economic turmoil is in fact the worst since the Great Depression and none has occurred since Glass-Steagall until certain portions of it were repealed then restoring the original legislation is prudent.
It would be helpful to all involved if those in government could produce a series of consecutive actions that can be applauded universally as successful and impressive. At least then citizens could be reassured that it IS possible for government to do something right. There is currently little evidence to suggest that is the case.
Stanford Matthews
MoreWhat.com



You gotta love the CBO. Okay, you don’t have to but they’re so cool they have been added to this blog’s resource list in the sidebar. Both the CBO and The Director’s Blog have a link. This reaction to the CBO could change at any time as with other links featured here. But certainly the work of the CBO in the current political climate deserves credit.
The critical issue these days when discussing political parties should be national security as without effective defense every other debate is moot. The GOP fall from grace preceding two election cycles of defeat merely allowed the continuation of flawed governance. The only difference is party blue rather than party red.
Another event to once again raise the discussion on national security. Not like the status of US national security is ever erased from the American consciousness but one has to wonder if that includes the Obama Administration? The President has been criticized for not being more visible on this and other issues since heading to Hawaii on vacation. His security princess, Napolitano, stated after the Flight 253 incident, the first of two, that ‘the system’ was working properly. That someone was able to board a commercial aircraft and attempt to detonate explosives on final approach contradicts Napolitano’s conclusion. Unless only doing something after the fact is her idea of national security. And even then, simply notifying other commercial aircraft of the conditions on Flight 253 is of little value.
As a final note for this post a political point is in order. Bush bashers frequently express 9/11 happened on the Bush 43 watch so it was his fault. This blog has stated in the past that there is plenty of blame to go around regarding US national security. A couple of things to keep in mind. 9/11 was not conceived, planned or otherwise arranged by terrorists in less than eight months which is the time George W Bush was in office prior to the attack. Before that President Clinton completed two terms in office and posts here as well as information freely available elsewhere indicate some dropping of the ball as regards terrorism and Osama bin Laden, etc.
Another slight departure for typical posting on this blog courtesy of a story one simply cannot ignore. There are serious and dangerous implications in this bit of news. And there is the entertainment value from the fact that the scenario is so stupid as to be categorized under stranger than fiction. In other words, you cannot make this stuff up. Well, certainly you could. But would it be believable? Would it provide the suspension of disbelief most fiction writing requires? The sad truth is conditions on this planet have deminished to a point where this kind of story is all to common.
One of Senator Harry Reids’ recent press releases was whining about the GOP holding up confirmation of Obama nominees. It was stated that this is hurting the country by not allowing the administration to get on with their agenda. The Democratic party may have nothing to offer but they have excuses. How about the long list of Obama nominees who bowed out after being exposed as, most commonly, tax evaders. Yet they still managed to get Tax Cheat Tim Geithner confirmed as Secretary of the Treasury. A department that has been plagued by incompetence in this and the previous administration. So what else is going on with Obama staffers?
So to Senator Reid’s accusation the GOP is hurting America by holding up Obama nominations one could answer this way. Hey Harry, if the GOP is in fact holding up your nominees they may be doin’ y’all a favor. The ones that make it past getting nominated are not doing so well. Those who bowed out under scrutiny before the process indicate poor choices as well. And this post only reviews a tiny fraction of the failures. So just to improve the coverage let’s just mention one more, Van Jones.
Reports supported by the White House hailing the success of billions in porkulus spending to create or save jobs underscore the liberal need to preempt news their agenda is failing. Other reports tell a different story about stimulus money and jobs.



















