Here's an interesting article:
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.
That's Gramm-Leach-Bliley, which dismantled Glass-Steagall.
''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''
Larry Summers eh? Oh, you mean the stooge in Obama's Cabinet? Yes, him.
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.
Funny how we waited until everyone who went through that special Hell known as "The Depression" were dead, then we simply rode roughshod over what they taught us and declared them "fools."
''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''
Uh huh Mr. Gramm. Like your "mental recession" Mr. Gramm?
Freedom is the answer, but freedom does not include freedom to defraud, whether it is the fraud of a borrower overstating his income, the fraud of a ratings agency being "bought" or the fraud of an investment bank selling what it represents are "perfectly good" securities out the front door while shorting them on its prop desk in the next room.
''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 the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
And now we get to learn them again!
''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Citibank, Bank America, Wells Fargo, Wachovia, Washington Mutual, IndyMac, Downey Savings and Loan. Need I go on?
Supporters of the legislation rejected those arguments. They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks. The new law, they said, will also give regulators new tools to supervise shaky institutions.
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
History, ten years hence, has now played out.
Who was correct?
There is a special place in Hell for the architects and supporters of this legislation, and if we learn one thing from this, it is that we need to put Glass-Steagall back into place and repeal this piece of legislative dog squeeze.
Oh, and while you're at it, look at when that law was passed, and who signed it.
1999 - right at the peak of The Internet Bubble, and President Clinton put his signature to that piece of paper.
So much for "it was all Bush's fault".