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Robert Reich Calls for Glass-Steagall and
Public Investment Strategy for Italy

June 20, 2011 (EIRNS)—Robert Reich, U.S. Secretary of Labor from 1993-1997, issued a strong call for a return to a Glass-Steagall banking system during a conference in the central Italian city of Prato on Sunday night, last night. The event was organized by local City Councilman Nicola Oliva and the Democratic Party, and drew over 350 people to a theater in a city whose textile industry has been crushed by globalization over the past twenty years. Reich said that banks used to base their decisions on the needs of the local economy as a whole, but now all financial decisions are drawn into a global casino which ignores the needs of the population. He called for public investment in innovation and R&D (with a bit of green thrown in), and strongly criticized the push for austerity measures, which only make the situation worse and lead to a vicious cycle in which people's living standards are continuously driven down.

Reich discussed the need for high value-added industries and services, with investment in infrastructure and new technologies. We can not expect private capital to do this, he explained; the state must step in, with instruments such as a regional development bank, as proposed by Oliva and his collaborators for Tuscany.

Oliva and two other representatives of the local Democratic Party, Enrico Giardi and Ilaria Bugetti, spoke before Reich was introduced. The president of the Tuscany Region was supposed to speak, but did not show up due to a health problem in his family. Oliva cited the tradition of FDR and the various proposals he has fought for over the past two years: controls on speculation in foodstuffs, a commission on credit for local industries, and above all a maglev train line between Florence and Pisa airport, to bring a cutting edge project to Tuscany with new engineering capabilities and highly-skilled jobs. The conference with Reich was conceived as the first in a series of events by which Prato will regain its role as a center of technological and productive innovation, and demand the national and international institutions take up the systemic changes necessary to stop the current economic and social decline.

The response from the audience was enthusiastic, with numerous local entrepreneurs and opinion leaders posing questions to Reich on the global economic situation, and also the details of how to reorganize the national and international financial system. On this point, the moderator of the event, journalist Andrew Spannaus, pointed out the Kaptur bill in the U.S. House, and also the motions presented in the Italian Chamber of Deputies and Senate, encouraging the audience to work to guarantee a shift in the political and economic debate in Italy.