Tag: Glass-Steagall

Here’s one of many dogs that did not bark in Obama’s speech on financial reform:

You see, there has always been a tension between the desire to allow markets to function without interference and the absolute necessity of rules to prevent markets from falling out of kilter…blah, blah, blah….

….And I read a report recently that I think fairly illustrates this point.  It’s from Time Magazine.  I’m going to quote:

 “Through the great banking houses of Manhattan last week ran wild-eyed alarm.  Big bankers stared at one another in anger and astonishment.  A bill just passed… would rivet upon their institutions what they considered a monstrous system… such a system, they felt, would not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.”  

That appeared in Time Magazine in June of 1933.  (Laughter and applause.)  The system that caused so much consternation, so much concern was the Federal Deposit Insurance Corporation, also known as the FDIC, an institution that has successfully secured the deposits of generations of Americans.

Amid the laughter and applause, did you hear the silent dog?  

Crossposted at Square State

There is a lot of talk about the way which we need to go in order to fix our current very serious problems in the financial sector and the economy in general. There can be very little doubt one of the major causes of our crisis is the repeal of the Glass-Steagall Act in 1999. Now the Dog knows that some of his reader’s eyes are going to glaze over when the old hound starts to talk about economic policy, but he promises not to make it too dry and boring. Besides, none of us can really have an informed opinion if we don’t wade through this stuff.