By now most literate people who want to know have heard that the key contributor to the economic crisis was the elimination of bank regulations like the Glass-Steagall Act that, going back to 1933, prevented banks from taking the kinds of risks that caused the 1929 Crash and subsequent Depression. As the New York Times recalls, Obama has been eloquent on this subject:
"By the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework," Mr. Obama said in a speech on the economy at Cooper Union in New York in March 2008. "Instead of establishing a 21st century regulatory framework, we simply dismantled the old one," thereby encouraging "a winner take all, anything goes environment that helped foster devastating dislocations in our economy."
Today, more than a year after a finanical crisis that has collapsed much of the economy, our elected representatives are finally heeding candidate Obama's insights.
As we know from Obama's publicly known staff and from carefully fact-checked reporting, Obama's point of view may have changed some and now mirrors that of his many staff from CitiGroup, Goldman Sachs, and Bob Rubin's Hamilton Project.
So with foreclosures and bankruptcies skyrocketing and even-bigger banks earning record profits, how long will a new financial bubble inflate before Obama follows the advice of his economic advisor Paul Volcker on this? Whom will he enlist to ensure the reinstatment of Glass-Steagall happens smoothly, and soon?
Just which of the people we elected are fighting to make sure the banks are as carefully regulated as they were between 1933 to 1999? Is Obama leading?
Actually, it's Senators Maria Cantwell and John McCain.
Hmm - is this a brilliant behind the scenes success at bipartisanship led by the President - a year late, but an obvious solution strongly implied by his own analysis?
Bzzzt - wrong! Today's Obama is not just silent; his response has been to dispatch a bravely anonymous Official to object with the following new, deeper economic analysis. As Jason Linkins writes today:
The most cutting remark against McCain and Cantwell's efforts comes courtesy of Unnamed Treasury Official, who, as you might imagine, is some kind of awesome prick:
I think going back to Glass-Steagall would be like going back to the Walkman.
But hey, you'd go back to your Walkman too, if everytime you put your iPod on shuffle, it blew up the goddamned planet.