The Godfather unregulated banking, Sanford I Weill, just endorsed restoring the most fundamental provision of the Glass-Steagal Act – separating banks from risky investment activity, a cardinal principal of banking regulation from the Great Depression through the end of the Clinton administration (Weill Calls for Splitting up the Big Banks, NYT, July 26), If he’s serious, Weill should also demand a repeal of Commodity Futures Modernization Act of 2000, that bipartisan legislation that allowed derivatives to function without regulation. A turnaround by some masters of finance should not obscure the history described below (2009). It’s a toxic brew of the greed that motivate the ultra rich and their minions.
Huge majorities in both houses of Congress voted for legislation to allow the biggest bank heist of all time. But this time, it was the banks pulling the heist.
Our financial system looks ruined beyond repair. The credit default swaps crisis is 40 or so times bigger than the real estate meltdown over subprime derivatives. The top 25 banks in the United States are loaded down with $13 trillion in credit default swaps and the deal is coming unraveled. If we accept the highly dubious assumption that the debt from the financial meltdown needs to be repaid by us, were looking at $43,000 a citizen right now. And we’re just starting. Read the rest of this entry »
So, now it’s an imperative to “promote growth.”
