http://observer.com/2015/12/why-hillary-clinton-wont-prevent-the-next-economic-recession/
Ms. Clinton refuses to support reinstating Glass Steagall, as she feels it will not be a cure-all for Wall Street’s problems, and while she did cite economists who agree Glass Steagall didn’t directly cause the 2008 economic recession, she neglected to mention it had already lost much of its power due Wall Street deregulation under Mr. Clinton’s administration. The law was enacted to prevent history from repeating itself after the Great Depression, and shortly after its repeal history did just that with the 2008 economic recession. A failure to reinstate a contemporary form of Glass Steagall invites future recessions to occur.
Ms. Warren and many other politicians support reinstating Glass Steagall to help rebuild the wall between investment banking and commercial banking, while taking into account contemporary issues in the financial sector that were non-existent or irrelevant when Glass Steagall was first introduced in 1933. “By itself, the 21st century Glass Steagall Act will not end too big to fail and implicit government subsidies, but it will make financial institutions smarter and safer, and move us in the right direction,” she added.
Ms. Clinton’s comprehensive Wall Street Reform plan has a lot of positive attributes—many of which Ms. Warren and Mr. Sanders agree with—but the dismissal of reinstating Glass Steagall weakens her plan significantly. In her Times op-ed she argued that “we need to tackle excessive risk wherever it lurks, not just the banks.” Ms. Clinton attempts to debunk the reinstatement of the Glass Steagall Act as ineffective, but given the political power of big banks—with the five largest on Wall Street currently holding 45 percent of the nation’s banking assets compared to just 25 percent in 2000—her cautious reforms are insufficient.
Supporting Ms. Warren and Mr. McCain’s 21st century Glass Steagall Act should be a staple of both Ms. Clinton and Mr. Sanders’ Wall Street reforms, but Ms. Clinton is opting for a less aggressive approach, which doesn’t help distance her from Wall Street. Some of the biggest donations to the Clinton Foundation came from Bank of America, CitiGroup and Goldman Sachs. In the second Democratic debate, she fumbled an explanation of her Wall Street ties, going off on a rant about 9/11. Ms. Clinton’s disregard for Glass Steagall is indicative of her unwillingness to actually usher in change on Wall Street by holding banks accountable for their actions. Her vague talking points are just business as usual; political rhetoric from a well-seasoned lawyer who knows what to say to garner as much support as possible.
Senator Sanders believes reinstating Glass Steagall is a very important part of WallStreet Reform.
https://berniesanders.com/yes-glass-steagall-matters-here-are-5-reasons-why/
1. Too-big-to-fail banks are bigger, riskier, and more ungovernable than ever
America’s largest banking institutions are even larger now than they were before the 2008 financial crisis. The nation’s six largest banks issue more than two thirds of all credit cards and more than a third of all mortgages. They control 95 percent of all derivatives and hold more than 40 percent of all US bank deposits.
2. The argument that Glass-Steagall didn’t cause the 2008 financial crisis is wrong.
Hillary Clinton told the Des Moines Register that “a lot of what caused the risk that led to the collapse came from institutions that were not big banks.” This is part of a longstanding pattern, in which she largely absolves the big banks from culpability for the 2008 crisis while emphasizing “shadow banking” in her own Wall Street plan.
Secretary Clinton returned to that theme during Saturday’s debate, pointing an accusing finger at non-bank entities like AIG and Lehman Brothers while giving a pass to Wall Street’s biggest banks for their role in the crisis.
3. Repeal of the Act has not worked as promised.
Given the risks associated with the repeal of Glass-Steagall, what about the benefits? Turns out there aren’t many.
We were told that repealing Glass-Steagall would lead to more efficiency and lower costs, but neither of these promises has come true. No less an expert than John Reed, former CEO of Citigroup, now says those claims were wrong. Reed wrote in a recent op-ed (behind a firewall) that “there are very few cost efficiencies that come from the merger of functions – indeed, there may be none at all.”
4. The repeal of Glass-Steagall is further corrupting the culture of banking – if such a thing is possible.
Sanders was right when he said on Saturday night that “the business model of Wall Street is fraud.” The traditional practice of what Sen. Elizabeth Warren calls “boring” banking – opening savings accounts, reviewing loans, and providing other customer services – has largely been supplanted by high-risk gambling and the aggressive hustling of dubious investments to unwary clients.
The level of fraud unearthed since the 2008 crisis is nothing short of breathtaking. (The fact that no senior banking executive has gone to prison for that fraud is, if anything, even more breathtaking.) How did that happen?
Much more at the link.
Martin O'Malley also has an extensive plan to rein in the corruption AND it includes the reinstatement of Glass Steagel.
https://martinomalley.com/policy/financial-reform/
FINANCIAL REFORM
PROTECTING THE AMERICAN DREAM FROM ANOTHER WALL STREET CRASH
Governor O’Malley knows that the American Dream today remains out of reach for too many families. To attack this problem, it will take a multi-pronged and fearlessly progressive approach to addressing economic inequality. But the results of any steps we take as a nation to raise wages, ensure retirement security, and make the dream of homeownership a reality can be wiped out in an instant by another Wall Street crash.
We need to protect America’s economy. And we can only do it by implementing strong accountability and structural reforms that build upon the Dodd-Frank Act and put an end to too-big-to-fail, too-big-to-manage, and too-big-to-jail financial firms.