to avoid another
U.S. Sen. Elizabeth Warren appeals for support for her bill to save us from another financial disaster. Click image to enlarge.
THE BEST NEW U.S. Senator in generations, Elizabeth Warren, D-Mass., has, with three co-sponsors, introduced major new legislation that might just help avoid another financial meltdown like the one in 2008.
In an email received from her July 30, she writes:
“Senators Maria Cantwell, John McCain, Angus King and I have introduced a new 21st Century Glass-Steagall Act to once again separate ordinary banking from the high-risk activities that broke our economy.”
She is not the only one with the opinion that the Clinton period repeal of the Depression era law separating commercial banking from investment banking led to the financial collapse of 2008.
And she needs our help.
CALL FOR ACTION BELOW THE FOLD
AN ARTICLE FROM 2012 by James Rickards in US News supports Sen. Warren’s concern.
In Repeal of Glass-Steagall Caused the Financial Crisis on August 27, 2012 Rickards writes:
The email received from Progressives United, the organization of former U.S. Sen. Russ Feingold. Click image to enlarge.
“In fact, the financial crisis might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades.
“If there is any hope of avoiding another meltdown, it’s critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.”
He is right.
Before it became totally dysfunctional, Congress took a stab at it with the Dodd-Frank law. But during the writing of regulations to implement it (which has not yet been fully completed) the banking lobby was so powerful the end result has been meaningless.
So Sen. Warren wants to do something about it.
“The bill gives the financial institutions five years to split their commercial and investment businesses into distinct entities – shrinking the size of our big banks and taking an important step toward ending ‘Too Big to Fail,’ ” she writes in an appeal for support from Russ Finegold’s “Progressives United.”
“And because Wall Street won’t be gambling with the FDIC-insured money in savings accounts, we’ll help reduce the risk of future bailouts.”
According to the letter, nearly 50,000 members of the Progressives United community have already signed up as citizen co-sponsors of the 21st Century Glass-Steagall Act.
I was number 50,001!
The screen where I signed up as a citizen cosponsor and made a donation. Do the same. Click image to enlarge.
Sen. Warren has such class I even made a donation.
“When people like you and me work together, we can stand up to even the most powerful interests. That’s how we’ll level the playing field for working families and lower the risk of future crises,” she wrote.
Rickard, a year ago, recommended the same thing.
“Now, when memories are fresh, is the time to reinstate Glass-Steagall to prevent a third cycle of fraud on customers,” he wrote.
“Without the separation of banking and underwriting, it’s just a matter of time before banks repeat their well-honed practice of originating garbage loans and stuffing them down customers’ throats. Congress had the answer in 1933. Congress lost its way in 1999. Now is the chance to get back to the garden.”
I would add Bill Clinton to the list of those to blame. He enthusiastically signed the bill that caused the financial meltdown.
Much earlier, in November 2009, Cyrus Sanati at The New York Times reached the same conclusions in “10 Years Later, Looking at Repeal of Glass-Steagall.”
“…10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall’s financial crisis.
“While the majority of problems that occurred centered mostly on the pure-play investment banks like Lehman Brothers, the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place.”
Let is help Sen. Warren.
CALL FOR ACTION
Sign up as a citizen co-sponsor of Sen. Warren’s bill. Click here to do so.
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