Bringing back Glass Steagall Act would be nice

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By Arthur Johnson

Everyone who is now on the streets in the Occupy Wall Street movement is showing their American right of frustration on how bad the American Dream is turning out personally for them.Ever since I can remember, I have been frustrated about how the American culture has been evolving since big money has used their money to change things to benefit mostly themselves.

First read my article on JP Morgan how a good bank became a bad bank and you too will become frustrated. Can things get better ? I ask my self all the time. Should I ignore that more than 20% of the people who want to work are unable to find work that can move my country back to its fine tradition of a greater glory we once had. First of all we must find out who is stopping things from getting better.

The Republicans have always felt that having Social Security is not a God given right and in the disguise of saving money and cutting down on the deficit, needed reforms are needed. What a joke that is when everyone, who is not gainfully employed, basically needs a decent job to survive. The Republicans with the help of George W. Bush gave the large financial Corporations extreme powers and now we are paying for it.

Okay bear with me. This Country the United States of America was not created so that huge institutions (Corporations)Banks Government, Media could rule us. The last time this happened with such catastrophic results was in the late 1920’s when big banks and insurance companies went unchecked by regulation. Something the Republicans are always against.

Take the Glass Steagal Act why wasn’t it re-enacted again to protect the big majority of us, the 99% of us ? Commercial banks had been too speculative in the 1920’s because they were investing the depositors cash in creating and selling securities. Senator Carter Glass, a former Treasury secretary and Henry Bascom was a US House of Representative and chairman of the House Banking and currency committee   set up a regulatory firewall between the commercial and investment activities. Both were curbed and controlled by creating this barrier the Glass Segall Act that was aiming to prevent banks’ use of deposits in the case of a failed security offering.

By now you are familiar what the Glass Steagall Act is and how it  protected us for over 62 years against the Big Banks. The Glass-Steagall act disallowed two types of banks to combine the commercial  bank (depository)and the trading and investment banks, Merrill Lynch . This separation of these two banking interests were put in place to protect the depositors from huge losses. The distinction the Glass Steagall Act made that commercial banks and depository banks, should limit the risk by having low-risk banking  activities. Lending and extending credit to individuals and small businesses. While on the other hand Investment banks were to engage in riskier activities of issuing and trading securities. Security activities can be risky, leading to enormous losses and these losses could threaten the integrity of the depositors of a commercial bank. When the Glass-Steagall Act was repealed in 1999 it created Banks that were too big to fail by their nature of conflicts of interest of two banks.

Wouldn’t this be time to bring back the Glass Steagall act? Something that protected and safeguarded American public for over sixty years? The de-regulation of banks and Wall Street influence on politics of America can be minimized or lowered. Banks should stay and do what they are supposed to so, lend money and grow the economy and work for public interests. The are of course entitled to make profits and they will but there should be some separation of powers and limitations on such institutions.

I don’t know if Occupy Wall street would mind having Glass Steagall act back, but it will be a good starting point for a serious demand they can place forward.

 

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