At the Friday press briefing, White House press secretary Josh Earnest said the president was still focused on implementing the Dodd-Frank Wall Street Reform that passed in 2010, effectively distancing the administration from backing the bipartisan effort to reinstate Glass-Steagall.
Recently, Senators Elizabeth Warren and John McCain reintroduced a bill to restore Glass-Steagall, the legislation enacted in the wake of the 1929 stock market crash. The bill would break up the too-big-to-fail banks into two separate entities: commercial banks that provide consumer services like checking and savings accounts, auto loans, home loans and the like, and investment banks that deal in high risk practices. It’s pretty much a given that the Republican-controlled House won’t even bring it to the floor, but it is extremely disheartening to find that the White House is not on board with the effort.
“At this point, we believe that the kind of implementation of Wall Street reform is the most effective way to protect our economy and middle-class taxpayers,” Earnest said. “Wall Street reform has been incredibly effective at reforming our financial system in a way that looks out for the interests of middle class families and taxpayers.”
Dodd-Frank has already been rolled back once and although there are those who say it’s no big thing, well – yeah, it is. Why? Because as both Senator Warren and Senator McCain point out, while the banks should be able to make those risky investments, they should not be able to do so with taxpayers on the hook to bail them out again if something goes wrong. And you can bet your bottom dollar – if you still have one – that eventually, something will go wrong. Because when you’re playing with other people’s money, and getting paid handsomely to do so, you really don’t give a damn if a retiree somewhere out there loses everything and has to go back to work. You don’t really give a damn if families lose their homes. Remember back during the Romney campaign when his answer to the housing crisis was that wealthy people should buy up all those houses that were foreclosed on and rent them out? How would you like it if your home were snatched out from under you but you could still live there, except you’d have to pay rent and your rent was twice what your house payment was – that would be the house payment you couldn’t afford after the ARM kicked in? For that matter, maybe it’s already happened to you.
The last line in The Hill report reads: Most economists and Federal Reserve policymakers refute liberals’ assertions that the repeal of Glass-Steagall was part of the cause of the 2008 crisis.
Really? Making bad loans to people with no credit or lousy credit and/or lying to people taking out those loans regarding exactly what an ARM is and what could happen if the interest rate goes up and then packaging those loans as investment opportunities had nothing to do with the collapse? Even hedge fund manager James Rickards knows that’s a steaming load of outright lies.
The Obama administration has accomplished a lot of great things, and I appreciate all of them. But at the same time, there have been massive disappointments. I’ve written about them and got a lot of flack for criticizing the president in certain areas. One of those areas has been Wall Street. We all remember former Attorney General Eric Holder saying the too-big-to-fail banks were too big to prosecute. Prior to signing on with the White House, Holder was a partner in Covington and Burling, a white collar defense firm with clients that include Morgan Stanley, Wells Fargo, Chase, Bank of America and Citigroup. And now Holder has returned to his old position – which was held open for him for the six years he was with the White House. That’s not kosher, but we’re talking about Wall Street here, so… Matt Taibbi wrote a terrific piece for Rolling Stone. It’s short, sweet and well worth reading.
Hillary Clinton is not on board with reinstating Glass-Steagall. Not surprising, since her husband’s administration is responsible for repealing it.
Former Maryland Governor Martin O’Malley is in favor of getting it back on the books.
And, of course, Vermont Senator Bernie Sanders is a huge proponent of restoring the law and sanity on Wall Street.
My question is why isn’t President Obama on that page?