A little history - banking and regulation
Sounds like someone that we need today. From the
St. Petersburg Times:
This Florida senator took hard line on bad bankers during the Depression
Some of the best known names on Wall Street are hauled before a congressional committee and their testimony yields stunning accounts of a financial system out of control.
One of the wealthiest men in America paid no income tax for three straight years. Others manipulated stock sales with family members to avoid paying taxes.
Outraged committee members hear testimony about banks engaging in rampant stock speculation. Even credit markets were looted in pursuit of profit.
Sound familiar?
Such testimony didn't come from executives of Bank of America, Citigroup, Goldman Sachs and Morgan Stanley when they were recently hauled before a House committee plumbing the depths of the nation's financial crisis. Neither was it part of AIG's defense last week for paying millions of dollars in executive bonuses despite needing a $170 billion government bailout.
Instead, the Wall Street revelations date to the 1930s, when lawmakers similarly sought answers to an economic disaster — the 1929 stock market crash.
Chairing the investigation was a Floridian, Jacksonville Sen. Duncan Fletcher, whose name today is largely lost in history. But his probe of the freewheeling financial era that crashed with the Great Depression spanned two years, filled 11,000 pages of testimony and spawned many of the nation's banking regulations still in place.
The Glass-Steagall Act of 1933 grew out of Fletcher's hearings, separating commercial banks from investment houses. Bank deposits became federally insured, protecting Americans' nest eggs, while the Securities Exchange Act of 1934 also tightened Wall Street regulation.
Glass-Steagall endured until Congress in 1999 bowed to pressure from the banking industry and repealed the measure. Many critics now blame the repeal for sparking the current global crisis, since risky investments and subprime lending flourished in the newly deregulated climate.
We have many examples of people like that in our history but not too many today. I wish that this was not the case...
And let's see:
Glass-Steagall endured until Congress in 1999 bowed to pressure from the banking industry and repealed the measure.
That would put it firmly in Bill Clinton's watch. Republican Congress though.
Posted by DaveH at March 23, 2009 7:14 PM
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