They say that politics makes strange bedfellows, and apparently, that saying holds true for economics. Senators Elizabeth Warren and John McCain have joined forces in the fight to make banking boring again.
Last week, the progressive senator from Massachusetts teamed up with the far-right conservative from Arizona to introduce legislation that would reinstate the Glass-Steagall Act.
That bill was originally enacted in 1933 to separate commercial banking and investment banking, and prevent Wall Street from gambling with the federally-backed deposits of everyday Americans. That law was quite successful until it's repeal during the Clinton Administration, when then-Senator Byron Dorgan warned us of the inevitable damage that would be caused by allowing Wall Street to blur the lines between banking and making risky investments.
Senator Dorgan said, “I think we will look back in 10 years' time and say we should not have done this, but we did because we forgot the lessons of the past and that that which is true in 1930s is true in 2010.”
And, just about 10 years after that statement, the too-big-to-fail banks crashed our economy and held out their hands for a bail out.
Thankfully, Senators Warren, McCain, and others are working to undo some of that damage and reinstate the law that helped keep Wall Street in check. According to Senator Warren, the bottom line is that “Despite the progress we've made since 2008, the biggest banks continue to threaten our economy.”
It only took banks a decade to remind us why we needed these important regulations, yet we've barely held these too-big-to-fail banks responsible for their crimes. Reinstating Glass-Steagall could be a monumental step towards protecting our economy and turning banking back into the safe, boring profession that it should be.
Call your Senators today and tell them to support the re-instatement of Glass-Steagall.
-Thom
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