Courtesy of Pam Martens.
President Bill Clinton Laughs It Up as He Signs the Repeal of the Glass-Steagall Act, November 12, 1999
Breaking up the dangerous banks on Wall Street that are gambling with their taxpayer-backstopped insured deposits by restoring the Glass-Steagall Act is now a part of the newly adopted platforms of both the Democrat and Republican parties. Under a restored Glass-Steagall Act, banks holding insured deposits would not be allowed to affiliate with Wall Street investment banks and brokerage firms that regularly underwrite risky securities and engage in trillions of dollars of derivative gambles. It would effectively put an end to the idea that these complex banks are too-big-to-fail because the life savings of small savers holding insured deposits in the bank would be at risk.
Bernie Sanders’ supporters pushed the Democratic Party to include the provision in its platform. Today’s media spin is that Trump & Company added it in hopes of picking up some Sanders’ supporters who have vowed not to vote for Hillary Clinton.
What has been lost in the frenzy of political posturing is that there already exists a bi-partisan bill in the Senate to restore the Glass-Steagall Act. It’s called the “21st Century Glass-Steagall Act of 2015” and is co-sponsored by progressive Senator Elizabeth Warren and Republican Senator John McCain among others.
McCain’s eyes were opened wide on the need to restore the Glass-Steagall Act when he sat as ranking member of the U.S. Senate’s Permanent Subcommittee on Investigations under the Chairmanship of Senator Carl Levin. That Subcommittee effectively became the missing U.S. Justice Department in exposing serial frauds by the Wall Street mega banks.
After the Subcommittee released a scathing 307-page report in 2012 on JPMorgan Chase’s use of insured deposits to make high-risk gambles in exotic derivatives in London and lose $6.2 billion in the process (the London Whale scandal), Senator McCain had this to say in his opening remarks at the hearing on the matter:
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