Thread: "Class Warfare"

Originally Posted by Harshaw

Oddly enough, no one who says this can say 1) what regulation would have prevented it, 2) who proposed it, and 3) how it would have stopped it.

You need specifics if you're going to make this claim.

I thought everyone was familiar with the Glass Steagall Act by now:

"Many causes for the financial crisis have been suggested, with varying weight assigned by experts.[11] The United States Senate issued the Levin–Coburn Report, which found "that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."[12]

Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets.[13] The 1999 repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks.[14] In response to the financial crisis, both market-based and regulatory solutions have been implemented or are under consideration.[15]

Late-2000s financial crisis - Wikipedia, the free encyclopedia

A Short History of Financial Deregulation in the United States

"1978, Marquette vs. First of Omaha – Supreme Court allows banks to export the usury
laws of their home state nationwide and sets off a competitive wave of deregulation,
resulting in the complete elimination of usury rate ceilings in South Dakota and Delaware,
among others.

1980, Depository Institutions Deregulation and Monetary Control Act – Legislation
increases deposit insurance from $40,000 to $100,000, authorizes new authority to thrift
institutions, and calls for the complete phase-out of interest rate ceilings on deposit
accounts.

1982, Garn-St. Germain Depository Institutions Act – Bill deregulates thrifts almost
entirely, allowing commercial lending and providing for a new account to compete with
money market mutual funds. This was a Reagan administration initiative that passed with
strong bi-partisan support.

1987, FSLIC Insolvency – GAO declares the deposit insurance fund of the savings and
loan industry to be insolvent as a result of mounting institutional failures.

1989, Financial Institutions Reform and Recovery Act – Act abolishes the Federal Home
Loan Bank Board and FSLIC, transferring them to OTS and the FDIC, respectively. The
plan also creates the Resolution Trust Corporation to resolve failed thrifts.

1994, Riegle-Neal Interstate Banking and Branching Efficiency Act – This bill
eliminated previous restrictions on interstate banking and branching. It passed with broad bi-
partisan support.

1996, Fed Reinterprets Glass-Steagall – Federal Reserve reinterprets the Glass-Steagall
Act several times, eventually allowing bank holding companies to earn up to 25 percent of
their revenues in investment banking.

1998, Citicorp-Travelers Merger – Citigroup, Inc. merges a commercial bank with an
insurance company that owns an investment bank to form the world’s largest financial
services company.

1999, Gramm-Leach-Bliley Act – With support from Fed Chairman Greenspan, Treasury
Secretary Rubin and his successor Lawrence Summers, the bill repeals the Glass-Steagall Act
completely.

2000, Commodity Futures Modernization Act – Passed with support from the Clinton
Administration, including Treasury Secretary Lawrence Summers, and bi-partisan support in
Congress. The bill prevented the Commodity Futures Trading Commission from regulating
most over-the-counter derivative contracts, including credit default swaps.

2004, Voluntary Regulation – The SEC proposes a system of voluntary regulation under
the Consolidated Supervised Entities program, allowing investment banks to hold less capital
in reserve and increase leverage.

2007, Subprime Mortgage Crisis – Defaults on subprime loans send shockwaves
throughout the secondary mortgage market and the entire financial system.

December 2007, Term Auction Facility – Special liquidity facility of the Federal Reserve
lends to depository institutions. Unlike lending through the discount window, there is no
public disclosure on loans made through this facility.

March 2008, Bear Stearns Collapse – The investment bank is sold to JP Morgan Chase
with assistance from the Federal Reserve.

March 2008, Primary Dealer Facilities – Special lending facilities open the discount
window to investment banks, accepting a broad range of asset-backed securities as collateral.

July 2008, Housing and Economic Recovery Act – Provides guarantees on new
mortgages to subprime borrowers and authorizes a new federal agency, the FHFA, which
eventually places Fannie Mae and Freddie Mac into conservatorship.

September 2008, Lehman Brothers Collapse – Investment bank files for Chapter 11
bankruptcy.

October 2008, Emergency Economic Stabilization Act – Bill authorizes the Treasury to
establish the Troubled Asset Relief Program to purchase distressed mortgage-backed
securities and inject capital into the nation’s banking system. Also increases deposit
insurance from $100,000 to $250,000.

Late 2008, Money Market Liquidity Facilities – Federal Reserve facilities created to
facilitate the purchase of various money market instruments.

March 2009, Public-Private Investment Program – Treasury Secretary Timothy Geithner
introduces his plan to subsidize the purchase of toxic assets with government guarantees."


https://docs.google.com/viewer?a=v&q...Lg6X_hGSOseyKQ

Originally Posted by Catawba

15 months ago was before the GOP laid their class war open for everyone to see.

That, too, is said every single year.

Originally Posted by Catawba

I thought everyone was familiar with the Glass Steagall Act by now:

"Many causes for the financial crisis have been suggested, with varying weight assigned by experts.[11] The United States Senate issued the Levin–Coburn Report, which found "that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."[12]

Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets.[13] The 1999 repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks.[14] In response to the financial crisis, both market-based and regulatory solutions have been implemented or are under consideration.[15]

And it would have stopped it, how?

Originally Posted by Harshaw

That, too, is said every single year.

Never before 2010 had a budget been proposed by the GOP that has seniors take the fall for the debt caused by tax cuts for the rich. Never before had the GOP openly defended the tax breaks to companies for outsourcing American jobs. And never before had the GOP demanded tax cuts for the wealthy during the greatest Recession since the Great Depression.

Originally Posted by Harshaw

And it would have stopped it, how?

It would have prevented the unsecured risks with public assets, and it would have prevented banks too big to fail. If the Glass Steagall Act had still been in place we could have just let the investment banks fail with out risking the commercial banks and the world economy.

Originally Posted by Catawba

Never before 2010 had a budget been proposed by the GOP that has seniors take the fall for the debt caused by tax cuts for the rich. Never before had the GOP openly defended the tax breaks to companies for outsourcing American jobs. And never before had the GOP demanded tax cuts for the wealthy during the greatest Recession since the Great Depression.

Yet it's still said, every year.

Originally Posted by Catawba

It would have prevented the unsecured risks with public assets, and it would have prevented banks too big to fail. If the Glass Steagall Act had still been in place we could have just let the investment banks fail with out risking the commercial banks and the world economy.

So, if I take this arguendo as fact, you're saying the repeal of Glass-Steagal caused the collapse?

Originally Posted by Catawba

Libertarians believe in banking deregulation

So what is a person who leans strongly toward libertarian but does not believe in banking deregulation?

Fact of the matter: you're trying to bash an entire political philosophy based on a couple of stereotypes, and the alternatives to libertarian principles are what we've had for 30 years. The same central bankers, the same pork bills, corporate favors, pro-free trade, and government-growing policies. Republicans lie that they're fiscally conservative and Democrats lie that they're socially liberal or anti-war. They're all the same ****ing people, so I say **** 'em. You say **** only some of 'em.

Originally Posted by Harshaw

So, if I take this arguendo as fact, you're saying the repeal of Glass-Steagal caused the collapse?

Did you see the long list of the financial deregulation over the last 30 years above? The repeal of the Glass Steagall Act was the straw that broke the camel's back, at least in regards to the 99%. The 1% made out like bandits, which in this case is a very accurate description of them as well!

There is a bill to reestablish the separation between investment banks and commercial banks, H.R. #1489. Unless someone is beholden to the Wall Street 1%ers, they should be behind this bi-partisan bill IMO:

H.R. 1489: Return to Prudent Banking Act of 2011
112th Congress: 2011-2012

"Return to Prudent Banking Act of 2011 - Amends the Federal Deposit Insurance Act (FDIA) to prohibit an insured depository institution from being an affiliate of any broker or dealer, investment adviser, investment company, or any other person or entity engaged principally in the issue, flotation, underwriting, public sale, or distribution of stocks, bonds, debentures, notes, or other securities. Prohibits officers, directors and employees of securities firms from simultaneous service on the boards of depository institutions, except in specified circumstances. Requires any such individual serving as an officer, director, employee, or other institution-affiliated party of any insured depository institution to terminate such service as soon as practicable after enactment of this Act. Requires an insured depository institution to wind-down in an orderly manner and terminate any affiliation prohibited by this Act. Amends the Banking Act of 1933 (Glass-Steagall Act) to expand its prohibition against the transaction of banking activities by securities firms. Declares that Congress ratifies the interpretation by the Supreme Court of specified statutory language in the case of Investment Company Institute v. Camp ( ICI vs. Camp) regarding permissible activities of banks and securities firms. Declares that the reasoning of the Court in that case shall continue to apply to the limitations placed upon security affiliations under the FDIA as enacted by this Act. Prohibits a federal banking agency or federal court from issuing an interpretation regarding such security affiliations that is narrower than that of Court in ICI vs. Camp. Makes technical and conforming changes to the Gramm-Leach-Bliley Act, the Revised Statutes of the United States, and specified federal law. Requires the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, or another appropriate federal banking agency to report to Congress a detailed description of the basis for its decision each time it makes a determination or grants an extension concerning an affiliation between insured depository institutions and investment banks or securities firms."

H.R. 1489 - Summary: Return to Prudent Banking Act of 2011 (GovTrack.us)

Originally Posted by Catawba

Did you see the long list of the financial deregulation over the last 30 years above? The repeal of the Glass Steagall Act was the straw that broke the camel's back

So then it's properly called the Clinton Collapse.