Thursday, December 17, 2009

Give McCain some credit

Posted By on Thu, Dec 17, 2009 at 3:56 PM

Let’s give credit where credit is due. This time credit goes to Pres. Obama’s opponent in the 2008 election, Sen. John McCain, as well as to Sen. Maria Cantwell, a liberal Democrat from Washington. These two unlikely allies are co-sponsoring a bill that would restore the Glass-Steagall Act (aka the Banking Act of 1933). If McCain and Cantwell are successful, their efforts would make giant banking institutions choose between being commercial banks or investment banks. The Glass-Steagall Act imposed an absolute firewall between the two types of banking, until it was repealed in 1999 by the Gramm-Leach-Bliley Act. It was the 1999 action, signed into law by Pres. Clinton, that allowed banks to throw reason to the wind and sell incredibly risky bundles of bad loans as investments. In other words, it was one of the sparks that lit the fire that nearly burned down the world economy late last year.

McCain and Cantwell’s efforts are paralleled in the House of Representatives, where several lawmakers have introduced similar legislation. The House Majority Leader, Steny Hoyer (D-Mary.), supports the efforts to bring back Glass-Steagall. Hoyer recently told Bloomberg News, "As someone who voted to repeal Glass-Steagall, maybe that was a mistake." Yeah, no kidding, dude. Hopefully, his efforts, and those of McCain and Cantwell, will find favor in Congress.

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