Byron Dorgan Nailed it 10 Years Ago on Repeal of Glass-Steagall

[Truth2Tell]

*FLASHBACK*

This 10 year old New York Times article on the repeal of Glass-Steagall is CLASSIC! Ohh if we only knew then...

CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS
By STEPHEN LABATON
Published: Friday, November 5, 1999

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.

The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

'"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Treasury Secretary Lawrence H. Summers said. '"This historic legislation will better enable American companies to compete in the new economy."

The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.

http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html">Read the whole thing here... it's awesome.

The award for prescience goes to Senator Byron Dorgan: "I think we will look back in 10 years' time and say we should not have done this..." Yathink?

Ohh, and then there's Larry Summers... bleating away. What a surprise.

And Phil Gramm. Nuff said.

Enjoy.

[Tangerine LaBamba]

1. Molly Ivins wrote about it, too,

at the time. She knew Phil Gramm - Texas, and all that, of course - and she despised him. Didn't trust him, and said that repeal of the Glass-Steagall would be disastrous.

[aquart]

2. I remember reading about the repeal and shrieking "Stupid! Stupid! Stupid!"

So count me as one of the ones who knew, too. It was obvious how could anyone not know?

[ColbertWatcher]

3. k+r, n/t

[Believing Is Art]

4. Didn't Shelby vote against the repeal, too? n/t

[Truth2Tell]

5. ...

One Republican Senator, Richard C. Shelby of Alabama, voted against the legislation. He was joined by seven Democrats: Barbara Boxer of California, Richard H. Bryan of Nevada, Russell D. Feingold of Wisconsin, Tom Harkin of Iowa, Barbara A. Mikulski of Maryland, Mr. Dorgan and Mr. Wellstone.

[Believing Is Art]

7. Okay, I'm not crazy. Thanks n/t

[No.23]

6. You can thank these folks:

[Spoon]

8. Yup, nailed it indeed.

Wellstone as well:

''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''


Kerrey and Schumer, not so much:

''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.

''If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,'' said Senator Charles E. Schumer, Democrat of New York.



Shanghai may become the financial capital of the world BECAUSE of the repeal...



A great history of the runup to the repeal of Glass-Steagall from PBS Frontline:

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

[Truth2Tell]

9. Isn't it amazing how the same guys

keep getting it wrong over and over and over again, yet they continue to be revered as "experts" by the press and the political class?