The repeal of Glass Steagall itself did not cause the financial crisis. However, the repeal did help make the crisis worse.
I bring this up because there has been a series of straw man articles claiming Glass Steagall was not a cause in the crisis. This misstates the impact and the broader context. The overturning of the successful 1933 legislation was part and parcel of an ideology that WAS a major factor in the crash: The erroneous belief system that banks can self-regulate. This manifested in a variety of bad ideas, poor oversight and worse legislation.
The finacialization of the American economy allowed banks to become bigger, more complex, and greatly leveraged. When it all came down, the crisis was broader, deeper and more dangerous than it would have been otherwise.
Glass Steagall’s repeal, after 25 years and $300 million worth of lobbying efforts, culminated decades of radical deregulation.
New-fangled derivatives? No oversight, reporting, or reserves necessary, courtesy of the Commodities Futures Modernization Act of 2000 (CFMA). You can thank Enron Board Member Wendy Gramm, and her Senator husband Phil Gramm, for that one. Subprime-Lend-to-sell-to-securitizers business model? Those are the financial innovators! At least, that is what Alan Greenspan called them, and why he refused to oversee them as Fed chair. Rules on SEC leverage? Let’s create a special exemption from the law for just 5 investment banks. [...]
The misguided philosophy that led to the repeal of Glass Steagall also did contribute mightily to the crisis. The radical deregulatory philosophy from fools such as Alan Greenspan and Phil Gramm was certainly a major factor — and the Glass Steagall repeal was part of that continuum of bad ideas.
Blast from the Past. At Daily Kos on this date in 2008:
There's a real problem in naming monuments and buildings after living people, particularly politicians, as we are seeing in Alaska where half the state, including its main airport in Anchorage, are named after Sen. Ted Stevens. I'm sure the people of Alaska are bursting with pride that their airport (among other things) is named after an indicted crook. And if convicted? Then what? Does the airport keep its name?
But changing the name of an airport is expensive. And in times of budgetary constraint (like now), we must be prudent.
So here's my proposed solution:
DC never wanted its airport named after Ronald Reagan. It was imposed on the city, against its wishes, by congressional Republicans.
So let's take all that signage and ship it off to Alaska, where "Ted Stevens Achorage International Airport" can be renamed the "Ronald Reagan International Airport".
Then, back in DC, the folks at National Airport can break out the old signs from storage and give the airport back it's original and rightful name. (And one that does the city proud.)
Now I know some folks in Alaska may have a problem with this, especially given evidence that it's becoming Bluer by the day. I wouldn't want someone coming to Oakland and trying to slap "Ronald Reagan" names all over its airport. But is Reagan really all that much worse than an indicted crook like Stevens?
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