Time for a new Glass-Steagall?

posted at 9:21 am on July 12, 2013 by Ed Morrissey

Does anyone else find that all of the talk about breaking up the too-bog-to-fail discussions is somewhat akin to Mark Twain’s observation about weather conversation? Everyone talks about breaking up the giant financial institutions, but few seem keen on starting the project.  A bipartisan group of Senators — well, some Democrats and John McCain, anyway — have proposed reinstating a form of Glass-Steagall, the Depression-era law that blocked banks from higher-end investment activities until 1999.  That would force the biggest institutions to break up, but will the coalition pushing it ruin its chances?

Progressive Massachusetts Democrat [Elizabeth] Warren, a Banking Committee member and leading crusader for financial reform, introduced a bill Thursday to revive Glass-Steagall, the law passed in 1933 that separated commercial banking and investment banking. Glass-Steagall was repealed in 1999 by President Clinton, but progressives and some Republicans favor its reinstatement.

Warren’s bill would separate banks that provide checking and savings accounts from investment banking firms and hedge funds in an attempt to safeguard against another financial crisis. Conservatives are already lining up to oppose the bill.

“If Elizabeth Warren is leading the way on this bill, considering her views on [banking], then it’s probably not going to be a bill that conservatives will support in any way,” Richard Manning of Americans for Limited Government told The Daily Caller.

Warren’s bill is co-sponsored by McCain, Democratic Washington Sen. Maria Cantwell, and freshman Sen. Angus King, a left-leaning first-year independent from Maine who caucuses with the Democratic Party.

“Sens Warren and McCain introduce a bill to resurrect Glass-Steagall. Applause,” tweeted former Clinton administration Labor Secretary Robert Reich, a Berkeley professor and member of President Obama’s economic transition advisory board in 2008.

In principle, anyway, this would tend to improve the situation, but not solve it entirely.  The Bush and Obama administrations rescued the big financial institutions — at least those they liked — because a crash would have wiped out not just the investment-banking sector but most or all of the entire industry.  That happened in part because of the repeal of Glass-Steagall in 1999, and in part from consolidation within the financial services industry.

But the root cause of the crash wasn’t consolidation or even bad bets.  It was the government intervention into the mortgage markets in order to drive up housing demand that created the distortion in the first place.  Democrats and Republicans in Congress, and the Clinton and Bush administrations, all wanted to promote home ownership for their own political ends.  That push got so out of hand that the Bush administration belatedly and weakly attempted to restrain Congress when the market got too irrational.  Congress allowed Fannie Mae and Freddie Mac to infect the bond markets with junk mortgage-backed securities.  Even Glass-Steagall wouldn’t have rescued the investment sector from that crisis.

In other words, this isn’t a panacea, nor would it break up the big institutions on the financial-investment side on its own, where the risk really lies.  It would separate everyday banking functions from any folly in the investment sector, but it’s not all that clear that this would prevent the need for a bank bailout if the same set of circumstances arose, although the scale might be smaller – depending on how invested the banks are in the financial institutions. What’s needed is not just Glass-Steagall but also a rollback of consolidation in both banks and investment houses.

Still, as an incremental approach, this might be a good idea.  It’s difficult to see how to break up the too-big-to-fail institutions without Glass-Steagall at some point.  Bloomberg’s Simon Johnson offers five reasons that Congress should take up the proposal as an incremental reform:

1) The bill would actually help small banks, because it would force the taxpayer-subsidized megabanks and related financial companies to break up. Anything that tilts the playing field back toward smaller financial institutions is good for the small business sector.

2) The simplifying intent of the 21st century Glass-Steagall Act is complementary to other serious reform efforts underway, including plans for the “resolution,” or managed liquidation, of any financial firm that fails. The main problem for resolution is that the largest firms are incredibly complex, and the impact of any failure could reach far and wide in unpredictable way. Making the biggest financial firms simpler would also dovetail nicely with the legislation proposed earlier this year, by Senator Sherrod Brown, Democrat of Ohio, and Senator David Vitter, Republican of Louisiana, that would significantly increase capital requirements for the very largest banks.

3) Proponents of big banks will claim that the breakdown of the original Glass-Steagall Act (which separated commercial and investment banking) did not contribute to the crisis of 2007-08. That view is so wrong that James Kwak and I wrote an entire book debunking it. More important, what did or did not happen in the run-up to 2007 is largely irrelevant. The doctrine of “too big to fail” has been with us for some time, but it was fully established by the policy response that followed the collapse of Lehman Brothers.

4) As the preamble to the 21st century Glass-Steagall Act points out, it represents a convergence with European reform thinking, as seen in the Vickers Report (for the U.K.) and the Liikanen Report (for Europe more broadly). We need structural change in banking in all major financial centers if large-scale cross-border banking is to become safer and better run.

5) The Treasury Department is not going to welcome the legislation — in fact, it may assist in mobilizing opposition. At this stage, this is an advantage, not a problem. Treasury has a severe case of reform fatigue. It’s time for someone else to carry the ball.

Conservatives are already mobilizing to oppose it, probably more because of the involvement of Warren and suspicions about her motives on anything to do with the financial sector.  Those aren’t necessarily bad instincts to have.  However, we’re five years out from the crash, and we still haven’t done anything about Too Big To Fail, leaving taxpayers vulnerable to another massive bailout if the worst happens.  Maybe this isn’t a bad first step to take — or at least take seriously enough to consider.  We have to start somewhere, after all.


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We have to start somewhere, after all.

Why?

Chris of Rights on July 12, 2013 at 9:26 AM

Every time government attempts to “tweak” capitalist entrepreneurship, things almost always turn out badly, unexpectedly, of course.

Bailouts…sometimes you just got to let the old rat-infested worm-eaten scuttlebuckets sink.

coldwarrior on July 12, 2013 at 9:27 AM

Can we break up the TBTF Federal Gov’t into, say, 50 smaller pieces too?

WryTrvllr on July 12, 2013 at 9:29 AM

This is where a smart Republican party could do a lot of things.

If Warren’s legislation is truly as painted here – a minor improvement that would slightly guard against future crashes but something the Left really, really wants…time to get something out of them for it.

One idea – pair this with ending the federal backing of Fannie Mae/Freddie Mac and the funding of organization in the FBI to investigate corruption and criminal incompetence at federally back quasi-government organizations?

The campaign for this writes itself…

“I agree with Sen Warren that the changes she suggests are on the whole positive. However, we know the real cause of the mortgage meltdown was the market distortions created by out of control quasi-government organizations like Fannie Mae.

As such I am asking Sen Warren to consider this additional legislation that will help address this threat, which is still with us, and to enable the prosecution of those that caused this mess in the first place.”

18-1 on July 12, 2013 at 9:31 AM

“Sens Warren and McCain introduce a bill to resurrect Glass-Steagall.”

Damn, this McCain does like mixing it up with Democrats. And to think this guy came close to being president. Banks don’t need breaking up. The federal government needs breaking up.

rickv404 on July 12, 2013 at 9:31 AM

At first I was tempted to say that if Warren is for it I’m against it. Then I saw that McCain was a cosponsor, and switched my antipathy to it on that basis.

Akzed on July 12, 2013 at 9:32 AM

WryTrvllr on July 12, 2013 at 9:29 AM

Not a bad idea. Maybe even draft a document to provide a framework for the government too.

Flange on July 12, 2013 at 9:32 AM

Still, as an incremental approach, this might be a good idea. It’s difficult to see how to break up the too-big-to-fail institutions without Glass-Steagall at some point.

Like a squirrel finding a buried nut, Senator Fauxchahontas has hit on a good idea. I will leave to the experts to decide if further actions are needed; but, as a start and/or incremental approach, separating regular savings and checking functions from investment functions is a no-brainer.

Let investors gamble with their own money. Don’t let the average Joe’s money be put at risk.

GoodAg77 on July 12, 2013 at 9:34 AM

Liawatha & McShamnesty leading the charge on Financial Industry Regulatory Reform…

What could go wrong?

*blech*

workingclass artist on July 12, 2013 at 9:36 AM

and freshman Sen. Angus King, a left-leaning first-year independent from Maine

She’s not even dead yet and perennial attention whore King is already channeling Olympia Snowe.

Cleombrotus on July 12, 2013 at 9:36 AM

Damn, this McCain does like mixing it up with Democrats. And to think this guy came close to being president. Banks don’t need breaking up. The federal government needs breaking up.

rickv404 on July 12, 2013 at 9:31 AM

How bout a twofer?

workingclass artist on July 12, 2013 at 9:37 AM

I’m in favor of breaking up the giant banks like Bank of America, etc.
The stupidity of having Warren and McCain out front to lead the effort leads me to believe that neither side really wants change because they have to know that anything coming from those sources is automatically suspect to conservatives.
At the end of the day it’s the same story we have seen before: RINO being played by democrats who in reality only want another issue to pummel conservatives with in the next election.

What conservatives (read Tea Party) should do is come up with their own banking reform plan that accomplishes the same thing by conservative means. Then have Rubio introduce it and have Ted Cruz allow himself to be wooed aboard by demanding a few changes that have already been agreed to in private. Democrats like Warren would automatically oppose it, but then who is it that’s blocking reform?
That is how you play this game. Republicans suck at it.

Curmudgeon on July 12, 2013 at 9:39 AM

Not a bad idea. Maybe even draft a document to provide a framework for the government too.

Flange on July 12, 2013 at 9:32 AM

Only if said document specifically states a right to free birth control, abortion on demand, and an I-phone, otherwise no.

Bishop on July 12, 2013 at 9:40 AM

Only if said document specifically states a right to free birth control, abortion on demand, and an I-phone, otherwise no.

Bishop on July 12, 2013 at 9:40 AM

That can go in the Freeamble.

Flange on July 12, 2013 at 9:44 AM

Liberals think govt is a state of nature, and everything in its way can expect to be overwhelmed eventually.

Here’s an idea for a new law, but I don’t think McCain or Warren will cosponsor it: For for every bill passed by congress, an existing law of comparable size and scope should be repealed when it’s signed into law.

And for the first ten years that this new law is in effect, ten existing laws should be repealed for every new bill passed, pending it’s being signed by POTUS.

Akzed on July 12, 2013 at 9:44 AM

But even if this is a good idea, having Wacko Bird and Stands With A Latte leading the charge is similar to having Hitler making the big military decisions; there only be disaster in the end.

Bishop on July 12, 2013 at 9:45 AM

Let investors gamble with their own money. Don’t let the average Joe’s money be put at risk.

GoodAg77 on July 12, 2013 at 9:34 AM

it’s not put at risk, it’s covered by FDIC. the money in investment accts is whats at risk and their are buttloads of disclaimers anytime you do an investment to inform you of risk. the fact is trying to make things risk free hurts returns. let the free market loose and people will bank where the risk level is acceptable to them.

chasdal on July 12, 2013 at 9:46 AM

That can go in the Freeamble.

Flange on July 12, 2013 at 9:44 AM

AHA! Well done.

Bishop on July 12, 2013 at 9:46 AM

I don’t get “We have to start somewhere,” certainly not as a rationale for this bill. McCain…seriously? He understood nothing about the 08 meltdown, and probably even less about its causes.

I’m tired of these “crises” that only some massive reform or restructuring will get us — how have we benefitted from Dodd-Frank? Wasn’t that supposed to address this problem? We won’t mention Obamacare or that other McCain-inspired and Warren-supported disaster Senate bill 744.

How about this for a change? Acutally produce the empirical evidence that demonstrates a specific causal chain, and then produce a bill that addresses that issue only.

Rush repeatedly asks why would anyone think that the current occupant of the WH knows anything about energy or healthcare or insurance….the same has to be asked here…over and over again– McCain? the guy who said he didn’t know much about the economy is now going to tell us how to fix the financial sector? And Warren? I suppose she acquired this expertise while using Ancestry.com.

EastofEden on July 12, 2013 at 9:47 AM

If you’re Too Big to Fail…You’re Too Big – Gov. Rick Perry

workingclass artist on July 12, 2013 at 9:47 AM

“We the freeloaders…”

Akzed on July 12, 2013 at 9:47 AM

<em

The original cause of the problem was and is the Govt, and the banks accelerated it as there was little or no Govt regulation on the MBS market since the whole game started under Clinton with the 1993 act passed that let essentially anyone who was a minority or low income bad credit risk get a mortgage. The Govt always blames anyone else but the Govt, and then they brainwash the public to agree

HAGGS99 on July 12, 2013 at 9:47 AM

But even if this is a good idea, having Wacko Bird and Stands With A Latte leading the charge is similar to having Hitler making the big military decisions; there only be disaster in the end.

Bishop on July 12, 2013 at 9:45 AM

HA! I hadn’t heard Stands with a Latte…that’s funny

workingclass artist on July 12, 2013 at 9:48 AM

However, we’re five years out from the crash, and we still haven’t done anything about Too Big To Fail, leaving taxpayers vulnerable to another massive bailout if the worst happens. Maybe this isn’t a bad first step to take — or at least take seriously enough to consider. We have to start somewhere, after all.

We could start with no congressional legislation over 100 pages and written in plain english?

How about thorough debates of congressional proposals as well & a reasonable review period for the American Citizens to weigh in?

workingclass artist on July 12, 2013 at 9:52 AM

It’s not just the banks. It’s the TBTF Banks/the fed/Fannie Mae and Freddie Mac/FHA/HARP/HAMP and finally the never ending money printing enterprise. It’s a clusterfark.

Oil Can on July 12, 2013 at 9:54 AM

Rush repeatedly asks why would anyone think that the current occupant of the WH knows anything about energy or healthcare or insurance….the same has to be asked here…over and over again– McCain? the guy who said he didn’t know much about the economy is now going to tell us how to fix the financial sector? And Warren? I suppose she acquired this expertise while using Ancestry.com.

EastofEden on July 12, 2013 at 9:47 AM

When are we going do something about Congressional Insider Trading?

workingclass artist on July 12, 2013 at 9:56 AM

It’s not just the banks. It’s the TBTF Banks/the fed/Fannie Mae and Freddie Mac/FHA/HARP/HAMP and finally the never ending money printing enterprise. It’s a clusterfark.

Oil Can on July 12, 2013 at 9:54 AM

Yep!

fubar

workingclass artist on July 12, 2013 at 9:57 AM

This would do nothing at all to prevent another banking crisis, and it didn’t have any impact on the most recent one. And from what I remember, it was pretty easy for financial institutions to work around this.

drewwerd on July 12, 2013 at 9:58 AM

Also, the majority of glass-steagall is still in place…

drewwerd on July 12, 2013 at 10:00 AM

Not a bad idea. Maybe even draft a document to provide a framework for the government too.

Flange on July 12, 2013 at 9:32 AM

That’s crazy talk.
You must be a terrorizt or sumpin’.

VelvetElvis on July 12, 2013 at 10:00 AM

But the root cause of the crash wasn’t consolidation or even bad bets. It was the government intervention into the mortgage markets in order to drive up housing demand that created the distortion in the first place. Democrats and Republicans in Congress, and the Clinton and Bush administrations, all wanted to promote home ownership for their own political ends. That push got so out of hand that the Bush administration belatedly and weakly attempted to restrain Congress when the market got too irrational. Congress allowed Fannie Mae and Freddie Mac to infect the bond markets with junk mortgage-backed securities. Even Glass-Steagall wouldn’t have rescued the investment sector from that crisis.

The best thing Ed has ever written.

This caused the ‘crisis’ which put the Left in the White House, and in charge of the Senate.

This is the anchor holding down our economy.

And the carcass of the dead GOP wants to work on breaking up banks, and bringing in more Dem voters?

faraway on July 12, 2013 at 10:04 AM

On the other hand, what will we do with thousands of unemployed ex-administration officials every 4-8 years?

WryTrvllr on July 12, 2013 at 10:07 AM

But then again, on the OTHER hand, we really don’t want TBTF Gov’t making risky “investments” with our retirement trusts do we?

WryTrvllr on July 12, 2013 at 10:12 AM

CRA and the Fed’s low interest rate actions combined to provoke the crisis, but bankers who thought every bad mortgage could be sloughed off to the government, via Fannie and Freddie, or securitized and sold off to Norwegian retirement funds or whatever certainly played their part as well.

When a market heats up and everyone else is making fat fees, bankers can’t stop themselves from joining in. The hogs are all feeding, and so must you. That’s why bankers should not be allowed to include consumer deposits in their funding mix, if that funding is being used to support a volatile trading book.

Reinstating Glass-Steagall might be the only workable way to build a fence around consumer deposits. And Ed is completely wrong– Glass Steagall would have protected consumer deposits during the crisis. Securitizing mortgages would have had to happen in a different business entirely, maybe owned by the same holding company, but the retail deposits would have been protected.

If HA is really interested is getting educated on the origins of the financial crisis and how Glass Steagall might have helped reduce the impact on main street America I’d suggest asking Scott Siprelle to write a guest article. He’s the smartest man I’ve ever heard talk on the subject, by far.

MTF on July 12, 2013 at 10:32 AM

I would be willing to trade a Glass-Steagall for the end of Warren’s Consumer Financial Protection Agency.

thuja on July 12, 2013 at 10:35 AM

drewwerd on July 12, 2013 at 9:58 AM

You can’t be serious.

On another note, bringing back G/S is a good thing regardless who pushes for it.

voiceofreason on July 12, 2013 at 10:36 AM

I wonder what Warren, a “leading crusader for financial reform” and prominent Native American politician, thinks about Tribal Member owned Western Sky Financial. Their loan rates seem a bit high to me.

KS Rex on July 12, 2013 at 10:36 AM

Conservatives are already mobilizing to oppose it, probably more because of the involvement of Warren and suspicions about her motives on anything to do with the financial sector.

Please don’t be a speculative buffoon Ed. It doesn’t become you.

The return of Glass-Steagal, in any form, is a very bad idea. The financial markets need less of this type of regulation and Obama era dismantling (under the guise of reform) in order to recover. Until then, get familiar with this type of economy and jobs situation.

The financial services industry is one of the most heavily regulated industries, along with energy. We have (or perhaps had) the most innovative financial markets on the planet. It has been a top employment and wealth creator for some time and largely replaced some of the economic prowess we lost in the manufacturing sector.

Doesn’t it seem strange to anyone that heavy-handed “regulation” directly correlates to our historically horrible economy- which has no end in sight? Or is that simply too politically inconvenient and lost in the drama?

The financial markets collapsed under the weight of a mortgage backed securities market that was largely structured, controlled, securitized and financed by…the government. That’s the cold, hard truth. So where’s our GSE or government reform? Oh that’s right. There is none. They’re too busy wagging fingers at the financial institutions and demonizing them.

You can’t fix a problem if you’re in denial- and the government is in denial. The solution isn’t about “too big to fail”. It’s about “too dumb and disingenuous to be honest”.

Marcus Traianus on July 12, 2013 at 10:49 AM

This is where a smart Republican party could do a lot of things.

If Warren’s legislation is truly as painted here – a minor improvement that would slightly guard against future crashes but something the Left really, really wants…time to get something out of them for it.

One idea – pair this with ending the federal backing of Fannie Mae/Freddie Mac and the funding of organization in the FBI to investigate corruption and criminal incompetence at federally back quasi-government organizations?

The campaign for this writes itself…

“I agree with Sen Warren that the changes she suggests are on the whole positive. However, we know the real cause of the mortgage meltdown was the market distortions created by out of control quasi-government organizations like Fannie Mae.

As such I am asking Sen Warren to consider this additional legislation that will help address this threat, which is still with us, and to enable the prosecution of those that caused this mess in the first place.”

18-1 on July 12, 2013 at 9:31 AM

Great idea, 18-1!!!

The main problem with Fannie and Freddie is that they are neither private nor government, but the worst kind of hybrid. Fannie and Freddie mortgage salesmen made commissions (sometimes in the millions of dollars) selling mortgages to often-insolvent borrowers, but had no downside risk, because they were lending Government money.

A private bank, who could lose money by lending to insolvent borrowers, usually imposes criteria to protect themselves, such as minimum down payments, points, or a maximum (monthly payment / income) ratio above which a borrower is not qualified.

Any “Glass-Steagall II” law needs to give Fannie and Freddie the choice between being totally private or totally public. If they are sold to private banks, they assume all the downside risk of making mortgages, and if too many borrowers default, too bad.

If they are to remain government-backed agencies to help low-income people buy homes, then there should be NO sales commissions to mortgage brokers working for them, and Congress should set strict criteria on who is qualified to borrow Government money, including points, minimum down payments, or maximum (monthly payment/income) ratio, with no exceptions. Also, Fannie and Freddie (if they remain Government-backed) should NOT be allowed to make adjustable-rate mortgages, where borrows qualify for an initial “teaser” rate but default when their interest rate doubles or triples.

Steve Z on July 12, 2013 at 11:08 AM

Damn, this McCain does like mixing it up with Democrats. And to think this guy came close to being president.

rickv404 on July 12, 2013 at 9:31 AM

Scary thought, isn’t it?

Burke on July 12, 2013 at 11:14 AM

Let everyone – whether rich or poor, whether lender or debtor, whether white or black – let EVERYONE eat their own damn losses. THAT is the only to fix things and if the whole industry tanks then so fkn what? We can’t defend creative destruction for some but not others.

abobo on July 12, 2013 at 11:32 AM

“Keating Five” McCain has this special power: that having him as a co-sponsor makes even or especially Sen. Warren look bad.

kunegetikos on July 12, 2013 at 11:53 AM

If the Republicans were smart, (always a question) they would tell the bankers to come up with a workable solution to the problem or they’ll go along with Warren. This may sound like pandering, but bankers know what happened in the financial meltdown and they know how to stop it from happening again, unlike the Democrats who assume they know and just want to do something, no matter what it is, to put on a show.

If they try to pull something that’s not serious, just vote with Warren and tell them they had their chance.

bflat879 on July 12, 2013 at 11:56 AM

In a monumental OWN GOAL, Conservatives are about to JUMP THE SHARK–in the worst example of “democratic party-ism” reactionary stupidity imaginable!

The enemy here is far worse than Warren and McCain. It’s the BAIL-IN policy that will inevitably steal your money–if you have any in a bank.

I cannot BELIEVE Conservatives wouldn’t jump on this one and just do it immediately. It’s a NO-BRAINER. It’s not only smart, it’s populist smart, and it kills the argument that conservatives are obstructionists. Re-establishing Glass-Steagall to protect people’s money in banks is a pro-people populist WINNER for Conservatives.

SEIZE THE DAY. Take it away from Warren and establish it as conservative policy–it was DEMOCRATS WHO KILLED GLASS STEAGALL, remember?!

Remember Cyprus? Remember the BAIL-IN? Well now that is established POLICY in the EU, and it’s about to become established policy in Australia too. It is already established as FACT that the FDIC worked on a report with CANADA to establish a bail-in policy in our neighbor to the North.

It’s COMING TO AMERICA. And, if we don’t have a firewall put up–VIA GLASS STEAGALL–to protect your money from the banksters, they’ll TAKE IT FROM YOU just like they did to the poor creditors (savers) who had money in the banks in Cyprus!!!!!

Start educating yourself on the BAIL-IN policy. It’s coming to this country one day soon, and they’ll steal your money too. They have to steal it; the derivative exposure will demand it:

http://cecaust.com.au/releases/2013_06_05_Kill_BIS_F.html

mountainaires on July 12, 2013 at 12:02 PM

Fauxcahontas

kunegetikos on July 12, 2013 at 12:08 PM

Fauxcahontas 1
Ed 0

HA is to the left of Warren in defending bailouts!

kunegetikos on July 12, 2013 at 12:11 PM

….bringing back G/S is a good thing regardless who pushes for it.

voiceofreason on July 12, 2013 at 10:36 AM

Conservatives really should listen to reason. As a strong conservative, I totally support this effort, and I don’t care WHO initiates it. Glass-Steagall–a separation of investment banking from ordinary banking–is the only thing that will protect YOUR money from derivatives exposure by the TBTF banks who are using Ben Bernanke’s low fed rate to grow their /exposure risk as we speak!

“Bail-in” is the policy that you are facing; if we don’t re-establish G/S it’s YOU who will lose everything. The FDIC doesn’t have the funding to protect you when the banks fail from over-exposure to derivatives. It’s going to happen; protect yourself now with G/S. Don’t be stupid.

mountainaires on July 12, 2013 at 12:11 PM

This is kinda like closing the barn door after the horses are all out and the barn has burned down.

There are really only three US banks that this would affect significantly (JPM, Citi, and B of A). And if you force them to separate their investment banks from their commercial banks, the commercial banks will become instantly insolvent and require bailouts by somebody, or force their closure and loss of thousands of jobs and billions from the FDIC fund. That’s why they will fight this, and so will Treasury and the Fed.

Nobody is making money in commercial banking right now. Ultra low interest rates combined with high and rising regulatory compliance costs have made conventional banking in the US unprofitable. We have cheap and free checking accounts now because the big banks can make money doing other things, which apparently Elizabeth Warren thinks is just terrible.

The last banking crisis has nothing to do with the next banking crisis. That’s the thing about banking crises, nobody can predict what will cause the next one. The next one is as likely to be caused by sovereign debt as anything, and bringing back Glass-Steagall is not going to prevent that.

Be careful what you wish for.

rockmom on July 12, 2013 at 12:18 PM

The financial services industry is one of the most heavily regulated industries, along with energy. We have (or perhaps had) the most innovative financial markets on the planet. It has been a top employment and wealth creator for some time and largely replaced some of the economic prowess we lost in the manufacturing sector.

Damn now that’s just too funny. We can just let the BRICs build everything and we’ll just divvy it up amongst ourselves.

Got it.

WryTrvllr on July 12, 2013 at 1:00 PM

OH yeah.

Corzine

WryTrvllr on July 12, 2013 at 1:01 PM

Is it me or does Ed sometimes seem to be not so conservative.

ScottiesRule on July 12, 2013 at 1:28 PM

Warren and McCain go together like Dodd and Frank.

Jasper61 on July 12, 2013 at 1:41 PM

i’m a small govt guy, but in the current atmosphere, i think glass-steagall is needed. the big banks know they will get bailed out, there is no doubt. if someone has a better idea, i’d love to hear it…

burserker on July 12, 2013 at 2:13 PM

McCain is an imbecile for the ages. We nominated this co@k-biter to run for President, and I voted for him. There isn’t a dime’s difference between him and O’Bozo.

Jaibones on July 12, 2013 at 4:00 PM

And to think this guy came close to being president. Banks don’t need breaking up. The federal government needs breaking up.

rickv404 on July 12, 2013 at 9:31 AM

Part One: No…he got slaughtered.

Part Two: Perfectly said.

Jaibones on July 12, 2013 at 4:03 PM

Please yes. I would reenact Glass-Steagall word for word I don’t care who is backing it. I’d ride McCain all the way back to a sane economy in which we do not socialize losses.

Theworldisnotenough on July 12, 2013 at 4:21 PM

So 5 years out and conservatives STILL blame the 10% of government backed loans that were in bad taste as the PRIMARY cause for collapse? Oy vey.

Rainsford on July 13, 2013 at 10:23 AM