Without a return to the Glass Steagall Act, which prevented banks from becoming “too big to fail”, this financial reform bill will not prevent another financial meltdown. “Among key provisions, it would give federal regulators authority to wind down troubled companies, in a bid to solve the problem of too big to fail“.
It’s not the winding down which needs to be addressed, it’s preventing corporations from becoming too big to fail, like insurance giant AIG. They first bought a bank to become a Bank Holding Company, then fed at the federal trough of tax payer dollars after they had become too big to fail. This is one of the ways banks have morphed into huge mega conglomerates and how trillions in wealth have been transferred to the banks. If Glass Steagall was in effect, AIG couldn’t buy a bank and then be bailed out by us.
Due to the repeal of Glass Steagall, banks own oil companies and oil companies own banks. This legislation exempts Big Oil from the new derivative regulations which allows banks to have loopholes in the shadow market of derivatives.
Bankers have become so influential, the SEC fine levied against Goldman Sachs is chump change. These bankers made billions betting against their own house of cards in the sub prime loan market by misleading investors. Then again maybe a fine of one or two billion wouldn’t be a big enough deterrent. Which is precisely why Glass Steagal worked so well for decades.
Patrick Henry said “I know of no way judging the future but by the past”. We’ve been held hostage by banks before but were able to reverse it through New Deal legislation. Now, once again, we’re held hostage by the banks and this legislation does not reverse it.
