So like a good little liberal I frequently read the Nation. This evening I was taken by surprise by an article by Robert Scheer about how McCain is supporting the repeal of the Gramm-Leach-Bliley Act.
http://www.thenation.com/...
I don't think anyone has addressed this in a previous diary. Sorry if I missed it!
As the article explains Phil Gramm was the chair of McCain's presidental campaign and in 2008 Obama repeatedly criticized the legislation that repealed the Glass-Steagall Act.
But now the roles are reversed, and it is McCain who, along with Senator Maria Cantwell, D-WA, has sponsored a bill to repeal Gramm's legislation, while Obama seeks to preserve it.
Glass-Steagall was a key part of the New Deal's reforms on banking. From the mid-1930's until 1999 it kept investment and commerical banks seperate. It was repealed with the support of the Republican controlled Congress and Bill Clinton. The "Too Big to Fail" banks our government had to bail-out were banks that had abused the new powers our government gave them at the end of the 20th century.
Rather than restore Glass-Steagall, the Obama-backed banking regulation bill passed last month by the Democratic majority in the House went along with the desire of Wall Street lobbyists to prevent the breakup of the big conglomerates and to block control of their massive trading in the derivatives that proved to be so toxic.
Although the Senate is likely to go along with the House, the McCain-Cantwell bill seeks to reinstate necessary regulations. Excuse me but did I just wander into Bizarro Land?
"... I want to ensure that we never stick the American taxpayer with another $700 billion--or even larger--tab to bail out the financial industry," McCain proclaimed in introducing his legislation. "...This country would be better served if we limit the activities of these financial institutions."
The legislation the Obama adminstration supports does not include serious regulation addressing the causes of the financial meltdown of 2008, and as Scheer explains:
It's no wonder, since Lawrence Summers, the president's top economic adviser, was not only a key proponent of reversing Glass-Steagall in the Clinton White House but also supported the Financial Services Modernization Act, passed a year later, that summarily exempted those suspect derivatives from any regulation.
Now, I doubt that McCain has suddenly seen the light and realizes the folly of Gramm-onomics. Since the Obama adminstration has come out against regulation, I'm sure McCain realizes he can score political points by seeming like he's looking out for the American people and not big banks.
But why have Obama and the Democrats allowed themselves to be put in this situation in the first place? If this is about anything other than securing campaign donations from big banks, I'd like someone to try to explain. Banking reform is one of the most important issues to me, since it affects the entire global economy. I hate the current health care reform bill but I understand why it is the only bill the Democrats may be able to get passed. I think they are wrong, but I can understand why some progessives defend it.
There is no excuse for not pushing for better banking regulation though. To me it says that the Democratic Party is hopelessly corrupt, in the House, in the Senate and even in the White House and electing "more and better Democrats" does not seem to be helping.