Bill Black: Repeal the Act Which Repealed Glass-Steagall, and Replace It with Glass-Steagall!
Feb. 6, 2017 (EIRNS)—In a Feb. 1 interview with Sharmini Peries of The Real News Network, Prof. William K. Black, Professor of Law and Economics at the University of Missouri, Kansas City, and former Litigation Director of the Federal Home Loan Bank Board, explained what Dodd-Frank should have been. And would have been, without Clinton-Obama opposition—the restoration of the 1933 Glass-Steagall banking separation act.
Prof. Black pointed to the top finance people whom the President has appointed, saying,
"This supposed populist who ran against big banks, against Goldman Sachs, has of course, appointed all these top people in finance. That’s who he’s listening to, not small business people. And so he said that Dodd-Frank has been disastrous, which is hilarious—you know, bank profits are high; their capital levels are much higher.... And Mnuchin has said that he’s going to go after the Volcker Rule."
"But, of course, this is an area where the New Democrats have neutered themselves because, if you recall, Hillary Clinton, supported by Paul Krugman said, ‘No, no, no. Don’t bring back Glass-Steagall.’
"Well, think how much shorter Dodd-Frank could have been if it had done intelligent things like the following:
‘The act repealing Glass-Steagall is hereby repealed. The interpretive rules as of 1965 are hereby reinstated 180 days after the effective date of this statute.’ That removes about 350 pages of statutes and about 2,000 pages of Volcker regulations and interpretations. And, ‘The Commodities Future Modernization Act is repealed’—that would have saved, again, 120 pages of statute, perhaps, and 600 pages of regulation."
Black said the 2008 crash occurred,
"[B]ecause Obama and the New Democrats lacked the courage to actually unwind the Clinton Era and Bush Era deregulation. And because they never created an understanding in the populace of what caused the crisis, which was these three epidemics of elite fraud—you could almost never hear the word ‘fraud’ even uttered by the President or Hillary Clinton, right?—there was nothing to push back against.
"So, you don’t have the population going, ‘Wait a minute, what [are] Trump and Mnuchin, you know, the Goldman folks, doing? They’re getting rid of the rules, that weren’t anywhere near as tough as the rules we had 60 years ago.... And you know, they’re going to produce the next crisis.