OWS/Tea Party Convergence - moment dreaded by the 1%
In a not so distant future, the following argument may take place, between a Tea Party advocate and an Occupy advocate, where the Tea Partier says, "You Keynesians, if you really wanted to attack Wall Street, you'd reinstate Glass- Steagall!" And the Occupier would counter, "You Friedmanites, if you really wanted to attack Wall Street, you'd reinstate Glass Steagall!"
The right supports it - If you listened to Michael Savage's conservative nationwide AM-radio talk show last night you would have heard an exchange with a caller who was defending the OWS demos (which Savage considers "vermin" and "jerks"). Savage was disparaging the demos as "communist," etc., but then berated the caller, saying, "if you really want to reform Wall Street, you want to restore Glass-Steagall!" Apparently, neither the OWS caller, nor Savage, realized that Glass-Steagall leads the list of protest demands. Savage is a staunch critic of the OWS demos, but, as it turns out, also of "uncontrolled speculation," and features the repeal of Glass-Steagall in his book, "Trickle Up Poverty."
The left supports it - Former Clinton Labor Secretary Robert Reich, writing in today's Christian Science Monitor, questions whether the Occupy movement will infiltrate the Democrats as the Tea Party has the Republicans; identifies the bailout as the common origin of both protests; and how Glass-Steagall would address it. "...Most tellingly, it was President Obama's unwillingness to place conditions on the bailout of Wall Street -- not demanding, for example, that the banks reorganize the mortgages of distressed homeowners, and that they accept the resurrection of the Glass-Steagall Act, as conditions for getting hundreds of billions of taxpayer dollars -- that contributed to the new populist insurrection. The Wall Street bailout fueled the Tea Party (at the Utah Republican convention that ousted incumbent Republican Senator Robert Bennett in 2010, the mob repeatedly shouted TARP! TARP! TARP!), and it surely fuels some of the current fulminations of Occupy Wall Street..."
What do the Occupiers say? - An article in the Chicago SunTimes, posted late Monday, lists the complete demands of the OccupyChicago movement to the left of the article text, as it appears on the computer screen. A modified version of the "official" Occupy Wall Street list, it nonetheless leads with Glass-Steagall as the number one item. Glass-Steagall is also mentioned in the article text, as follows: "...Leading off a list of 12 points was a wonkish [sic] one, a demand for the reinstatement of the federal Glass-Stegall Act, which kept banks out of the securities business. It's repeal in 1999 was a precursor to the financial speculation leading to the housing bust and a deep U.S. recession..." A "live Blog" from the "Speakers Corner" of the New York Occupy demos, proves that Glass-Steagall is a known theme among the demonstrators. At 3:22, "Woman from Maine came down to share her views. She wants to see the Glass-Steagall Act brought back. She wants to see a debt relief on student loans -- and she says Wall Street can pick up the tab. She wants to see an end to the rapid/computer-driven trades on Wall Street." At 2:29, "Man speaking now says the folks on Wall Street don't really create a thing ... it's all funny money, they move assets from one account to another. Says we took away the "adult supervision" and that Wall Street needs more regulation -- not less. Then he says the young generation is drawn to Wall Street for the money -- and that's causing a huge drain in other areas like education and medicine. Says it's time to bring back the Glass-Steagall Act... ends by saying, Bring back the sanity." At 1:31, "[Unemployed] Jacob has a sign saying, "Bill Clinton, Why did you remove the Glass-Steagall Act of 1933?" And just under that -- "Mr. Bush, Why did you rape the US?" Interviewed in the Burlington [Vermont] Free Press, the home-town Senator is all for the Occupy protests. In response to the question, "How does Wall Street consolidate money and power?" Sen. Bernie Sanders says, "One example from a political a perspective: when Wall Street wanted more deregulation, over a 10-year period, they spent $5 billion in lobbying and campaign contributions to do away with Glass-Steagall, to do away with the regulations that had prevented them from getting into this hyper-speculative mode. Five billion dollars to get what they wanted! That's extraordinary power."
What does the financial press say? - An "opinion" piece by financial writer and former Senate staffer Jeff McCord is featured in BusinessInsider, today, where he lobbies for Glass-Steagall. Apparently not aware that Glass- Steagall is already a demand of the OWS movement, McCord puts it second in his list of "suggestions" to OWS demonstrators. "As the lion of the Federal Reserve, Paul Volcker, and others have been saying for several years, it is time to restore the Glass- Steagall Act's separation of commercial banking from investment banking. Congress and the Clintonites (in unholy alliance with then Senator Phil Gramm, R-TX, and now Governor Rick Perry's adviser-mentor) made a serious and very expensive blunder in gutting Glass-Steagall..." An Oct. 7 NYT posting by Joe Nocera, "Revenge of the Gougers," mainly about credit card fees, reposted in today's eTaiwanTimes, sees the repeal of Glass-Steagall as pivotal. "It was, to be sure, a different world then, with regulated interest rates, the Glass-Steagall Act preventing banks from getting into lucrative trading and a sleepy business model that valued a steady dividend over a high-flying stock price. As interest rates were deregulated, Glass-Steagall abolished and investors demanded that bank stocks perform like Internet stocks, that ethos changed. Banks began looking in some dark corners for new revenue; this is when hidden fees began to creep into credit-card agreements, for instance..." A posting on CNNMoney by Jennifer Liberto says "The Volcker rule is a nod toward Glass-Steagall, a Depression-era law that Congress repealed in 1999. Glass-Steagall had prevented commercial banks from dabbling in investment banking. Some critics argue that its demise paved the way for deposit-taking banks to make colossal bad bets, while bank traders chased profits and big bonuses. But the draft rule that the Federal Deposit Insurance Corp. is expected to release on Tuesday goes much easier on the banks than the originally proposed blanket ban on proprietary trading. The rule got watered down in Congress, which enacted a broad Wall Street reform law in 2010..."
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