G.O.P. Joins Democrats Urging Glass-Steagall’s Revival. (Don’t Hold Your Breath.)

[Eugene]

Source: New York Times

G.O.P. Joins Democrats Urging Glass-Steagall’s Revival. (Don’t Hold Your Breath.)

By JEFF SOMMER JULY 19, 2016

Attacking big banks is as American as apple pie. But it’s a new entry on this year’s Republican menu.

In a convention surprise, the Republicans inserted a plank in the party platform calling for the restoration of a Depression-era law, the Glass-Steagall Act, that separated commercial and investment banking.

The law was repealed in 1999 during the Clinton administration, with bipartisan support, at the behest of the big banks, which said they needed to combine their investment and commercial functions in order to compete on the global stage.

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What the Republican Party did in adopting the platform plank on Monday night also seemed calculated to grab headlines. The 58-page draft of the official party platform included this one short sentence: “We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.”

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Those pronouncements may not mean much in the real world, however. Donald Trump has not made Glass-Steagall a campaign theme. Republicans in Congress generally oppose the law’s restoration. Hillary Clinton has expressed skepticism about the utility of reviving it.

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Read more: http://www.nytimes.com/2016/07/20/business/economy/gop-joins-democrats-urging-glass-steagalls-revival-dont-hold-your-breath.html

[Hortensis]

1. Now they're spray-painting fake gestures red for the populists?

"It’s not clear that Glass-Steagall, had it remained in place, would have staved off the financial crisis, which had many causes. Yet it has emerged as almost a code word in both parties for poking a finger in Wall Street’s eye, and exacting payback for the crisis bankers wrought. A draft of the Democratic platform — negotiated with the active participation of Senator Bernie Sanders’s supporters — also calls for restoring Glass-Steagall.

For both parties, it is a page straight out of the populist playbook.

What the Republican Party did in adopting the platform plank on Monday night also seemed calculated to grab headlines. The 58-page draft of the official party platform included this one short sentence: “We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.”

The Democratic platform draft, somewhat more expansive, embraces variety of measures “to downsize or break apart financial institutions when necessary to protect the public and safeguard financial stability.” One of those measures, it says, is “an updated and modernized version of Glass-Steagall and breaking up too-big-to-fail financial institutions that pose a systemic risk to the stability of our economy.”

Even as it invokes the bygone era of Glass-Steagall, the Republican platform reiterates a longstanding party goal: repealing the Dodd-Frank law and many of its regulations. A draft version of the Democratic platform, which is to be voted on at next week’s convention, on the other hand, calls for strengthening Dodd-Frank. It vows, “We will stop dead in its tracks every Republican effort to weaken it.”

Senator Elizabeth Warren, the Massachusetts Democrat, embraces restoration of Glass-Steagall, but she also calls for strengthening Dodd-Frank and for strengthening the Consumer Financial Protection Bureau, which she helped create. The Republican platform calls for elimination of the bureau, and does so with zest, saying it is “the worst” part of Dodd-Frank, and was “deliberately designed to be a rogue agency.”

Very good article, Eugene. Thank you.