James Baker III Endorses Glass-Steagall
Oct. 25, 2012 (EIRNS)—Former Reagan Treasury Secretary and Secretary of State under George H.W. Bush, James Baker III, expressed his support for reinstating Glass-Steagall in reply to a question from EIR Oct. 23. Baker was giving the Lee Hamilton Memorial Lecture, entitled "Civil Discourse and the Grand Bargain," at the Woodrow Wilson Center in Washington, on whose board he also serves.
During the Q&A, EIR's Bill Jones asked him about Glass-Steagall.
"The last time we were close to a bipartisan agreement in Congress was in the recent attempt to reinstate the Glass-Steagall legislation, but this was stopped by the Obama White House, which was totally opposed to it. Wouldn't this be an item around which Democrats and Republicans could be brought together, perhaps under a Romney Administration, in order to begin to put the economy back on track?"
The moderator, Wilson Center president Jane Harmon, asked Jones,
"Why don't you tell people what Glass-Steagall is?"
To which Baker replied,
"It would separate the commercial banks from the investment banks."
"This would relieve the commercial banks of all the debt piled upon them when the investment banks moved in on them, and would save the commercial banking sector which provides the life-blood to our industries."
Baker then continued,
"What it said was that if you are in investment banking, you cannot do commercial banking, and vice versa. I don't think that Romney would be in favor of Glass-Steagall. But reinstating it would be a great idea. When I was Treasury Secretary, we worked under Glass-Steagall. 'Too big to fail' is still with us today, and taxpayers may again be called upon to foot the bill. I would very much like to see a reinstatement of Glass-Steagall, as would Paul Volcker."
His characterization of Volcker's position on the subject, however, was inaccurate.