Community | October 26, 2011 | 30 comments

Wall Street Is Still Out of Control -- Obama Should Call for Glass-Steagall and a Breakup of Big Banks

source: http://www.huffingtonpost.com/robert-reich/wall-street-is-still-out-_b_1032446.html

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Robert Reich has agin hit the nail on the head with his reasoning why Wall St. in current form, is bad for this country and the world.

"Next week President Obama travels to Wall Street where he'll demand -- in light of the Street's continuing antics since the bailout, as well as its role in watering-down the Volcker rule -- that the Glass-Steagall Act be resurrected and big banks be broken up.

I'm kidding. But it would be a smart move -- politically and economically.

Dodd-Frank financial reform law to a pale reflection of its former self. Dodd-Frank is rife with so many loopholes and exemptions that the largest Wall Street banks -- larger by far then they were before the bailout -- are back to many of their old tricks.

If you want more evidence, consider the fancy footwork by Bank of America in recent days. Hit by a credit downgrade last month, BofA just moved its riskiest derivatives from its Merrill Lynch unit to a retail subsidiary flush with insured deposits. That unit has a higher credit rating because the Federal Deposit Insurance Corporation (that is, you and me and other taxpayers) are backing the deposits. Result: BofA improves its bottom line at the expense of American taxpayers."
  1. groups:
    Community,   News and Politics,   Progressive America,   LABOR
  2. tags:
    Economy,  Wall Street,  Banks,  Economic Crisis,  3 more
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30 comments // Wall Street Is Still Out of Control -- Obama Should Call for Glass-Steagall and a Breakup of Big Banks

  • COMMONSENSEFORCOMMONGOOD_COM
  • JustZ
    • 0
      JustZ  

    • Here here; Glass-Steagall worked VERY WELL for decades to keep Investment banking separate from day to day banking.

      If President Obama wants to ensure his reelection...not to mention jump start actual change on behalf of the 99% moving forward, he should reinstate the Glass-Steagall act himself via a Presidential Signing Statement.

    • 7 months ago
  • Leen61
  • dinm76
  • artemis6
  • RevKen
    • +3
      RevKen  
    • artemis6:

      Teddy Roosevelt knew this. He fought The Robber Barons and Broke up The Trusts. It took them 100 years but they have started putting them back together.

      Look at the oil and banking industries. W#e used to have a large number of local and regional companies with few national companies. Today we have mostly national companies with almost no local and regional companies.

      They have successfully gotten rid of competition and now they can run their businesses without caring about the customers. They know we need them and we have no options. This is not capitalism. One of the tenets of capitalism is fair competition.

    • 7 months ago
  • artemis6
  • RevKen
    • +5
      RevKen  

    • My Father was a corporate accountant for over 40 years. I have been listening to him tell me about the business world for most of that time. What I know from his stories is that Wall Street forces businesses to self destruct.

      Large corporations are slaves to their stock prices and Wall Street determines what the stock prices will be. If a company performs under the analysts predictions then the analysts will devalue the stock prices. This forces a company to concern themselves with short term profits instead of long term stability.

      In order to keep profits up over the analysts expectations a company might layoff workers or do a half assed remodel of a plant instead of building a new one. A company might not buy that new fleet of trucks that would lower their delivery costs by reducing fuel costs just so the profits for this quarter are high enough that the stock will not go down.

      I know that every business in America would be better off in their long term business goals if Wall Street disappeared.

    • 7 months ago
  • FoosMaster
  • GreatStoneface
    • +8
      GreatStoneface [removed]  

    • All well and good, but with the House as it is, it's a futile endeavor. We ALL must insure that the baggers and BlueDogs are jettisoned from both the House and the Senate next year for any real progress to be enacted. There is no alternative.

    • 7 months ago
  • faye59
  • oboith
    • +4
      oboith  

    • I know it won't happen, but the entire "W" gang should be brought up on charges of sedition and "treason" by the DOJ. America will never regain honor among nations until then. There..I've said it and I mean it!

    • 7 months ago
  • warman1138
  • Georgia_Jim
    • +4
      Georgia_Jim  

    • Breaking up these "To big to fail" bank would create tons of jobs and create more competition for consumers. For years the big banks have been elimating competition by mergering and buying up the competition while elimating jobs in the procress. It is time for Obama to bust up these big banks to create jobs for Americans!

    • 7 months ago
  • faye59
  • ThirdSection
  • faye59
    • +1
      faye59  
    • ThirdSection:

      To get The Glass-Stegall reinstated he'd need Congress. Roosevelt federalized the banks, maybe the President can break up the big boys. Geitner would have to cooperate wouldn't he?

    • 7 months ago
  • lazloman
    • +4
      lazloman  

    • I would love to see him call for the return of Glass-Steagall, but I won't hold my breath. I have been hearing that the banks are moving their money into government isured accounts, so that now WE the tax paying public are on the hook for their losses, great.

    • 7 months ago
  • kvb1
  • WakeUpPeople
    • +4
      WakeUpPeople  

    • Obama should be doing many things right now, but he is largely silent. He can spare us the platitudes... we need action. He needs to choose which side of history he will be on.

    • 7 months ago
  • kvb1
  • FoosMaster
    • +3
      FoosMaster  
    • WakeUpPeople:

      Not much that Obama can do on his own. It is up to Congress to pass the laws, Obama can only sign them. We Screwed up last election and allowed the TeaPublican defenders of the 1% to gain power. Now we have to fix it in the next elections. It needs to start in the Primaries where we MUST get some better choices to elect. It will probably take two election cycles to get enough good politicians to make a difference but if we don't vote due to apathy or outright anger at the government as a whole then things will get worse, *(See results of last election for Proof). We Must VOTE! We Must defeat the TeaPublican agenda before this country totally collapses.

    • 7 months ago
  • WakeUpPeople
    • +5
      WakeUpPeople  
    • FoosMaster:

      While I am a progressive, and I appreciate the social victories that Democrats occasionally produce, I am not fooled about Wall Street's influence on both parties. I think we have a better chance of financial reform with Democrats, but I know that blue dogs and the GOP will prevent any real reform with teeth.

      Obama has the bully pulpit, he can dictate the national dialogue of reform, and if (when) Congress fails to address the issues, Obama can use executive orders. The OWS movement, much like the civil rights movement, will not be resolved until we get justice. Truman used executive orders to integrate the military, and Eisenhower used them to desegregate public schools. It is controversial to use such measures, but desperate times call for desperate measures. History will judge him if he fails to act.

    • 7 months ago
  • FoosMaster
    • +2
      FoosMaster  
    • WakeUpPeople:

      Yes! And I to feel he is not doing enough. Though there are limits to his power to address these problems, he should do more and I feel that he has finally seen that the people will back him if he fights the TeaPublican agenda and I believe that his recent actions of the last few weeks has shown that, though not as much as I would like.

    • 7 months ago
  • David_H
  • David_H
  • FoosMaster
    • +1
      FoosMaster  
    • David_H:

      I agree about Obama appealing to the People and though I Do see him doing that recently, I to feel he is not going far enough. The part I disagree with is the part where you think that the Republican politicians would actually listen to the people. Yeah, they would like to have a second term but to them as long as they get Obama out of office then to Hell with everything else. They will NEVER vote for anything that Obama wants no matter what the consequences. Sadly I fear that we are stuck with what we have till next election. :(

    • 7 months ago
  • David_H
  • FoosMaster
  • WakeUpPeople
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