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Dear President Trump: Breaking Up (Banks) Isn’t So Hard to Do


#1

Dear President Trump: Breaking Up (Banks) Isn’t So Hard to Do

Nomi Prins

Donald, listen, whatever you’ve done so far, whatever you’ve messed up, there’s one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster! And it isn’t even hard to grasp or complicated to do. It’s simple, in fact. Reinstitute the Glass-Steagall Act. Let me explain.


#2

The Democrats' failure to restore Glass-Steagall (along with the ACA) resulted in their losing control of the House in 2010 and the Senate in 2014. Restoring Glass-Steagall is indeed long overdue, however:

Today's financial news is abuzz with Congress' current action to eliminate the few parts of Dodd Frank that put some token controls on the financial services industry, while retaining the parts that enable continued growth of too-big-to-fail banks at the expense of community banks (The too-big-to-fail banks that controlled 25% of US bank assets when they crashed the economy i n 2008 now control 50%, with no end in sight of their march to monopoly).

Restoring Glass-Steagall is 180 degrees from Trump's and Congress' current agenda. With the Comey hearings and Trump's daily tweets providing a smokescreen, Congress appears to be running full throttle to destroy what remains of FDR's New Deal, not restore any of it.


#3

To get an idea of the passion of both FDR as well as the American people against the banks consider this excerpt from FDR's 1933 inaugural address:

"... Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men..."

In 1936, in the face of tremendous resistance by organized money, at a campaign rally at Madison Square Garden a week before the election, FDR said:

"Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.

I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.

The American people know from a four-year record that today there is only one entrance to the White House—by the front door. Since March 4, 1933, there has been only one pass-key to the White House. I have carried that key in my pocket. It is there tonight. So long as I am President, it will remain in my pocket.

Those who used to have pass-keys are not happy. Some of them are desperate. Only desperate men with their backs to the wall would descend so far below the level of decent citizenship as to foster the current pay-envelope campaign against America’s working people. Only reckless men, heedless of consequences, would risk the disruption of the hope for a new peace between worker and employer by returning to the tactics of the labor spy..."

You want to hear a rousing campaign speech give the entire address a listen:


#4

Ms. Prins did you really mean to consign Senator Bernie Sanders to the lower House of Representatives?

I can think of a very compelling reason why Trump will not support re-instatement of Glass-Steagall. He will be told in no uncertain terms that if the government should do that the stock market would convulse and experience a crashing sell-off and does he really as POTUS want to be tagged with that? The stock market is something His Supreme Assholiness (thinks) he understands. Well, at least it's something he's heard about, unlike Frederick Douglass or the Party of Lincoln.


#5

Plenty of out of the boxes thinking through the article, but side stepping the entire issue of the worthless fiat we are all dealing in. Solving that issue could make all of this go away.


#6

This piece is confused and disingenuous. First, it fairly describes the bipartisan creation of Glass-Steagall, as well as its bipartisan dismantling. Then it calls for bipartisanship to reinstitute it. Totally an insane suggestion since both wings of the Duopoly today are wholly-owned subsidiaries of capitalists.

Unlike previous history, there are few in either party who will make any effort to upset the status quo except for political PR reasons. How many in either party ran on platforms calling for a new GS?

One interesting nugget is that the Rethug platform was to the left of the Dems on this and throughout the history of GS they have often been left of the Dems (in order to protect the private banking system).

And in the end, this is the crux of it: Glass-Steagall was a law designed to save capitalism from itself, not a way to create and protect banking for people as a national bank could, or the state-owned bank of North Dakota and credit unions do to some extent.


#7

Irrespective of the intent of the Glass-Steagall originators, the legislation effectively prevented main street economy crashes (or "panics" as they were labeled from 1789 until 1930) until it was repealed at the end of the 20th century.

Restoring Glass-Steagall is not the total solution, it is step one in a matrix of changes needed to restore an economy that works for 90 plus % of Murkins, in contrast to the current economy that works for far less than 10% of Murkins.