Usual Liar Washington Post Lies in an Unusual Way
Jan. 18, 2016 (EIRNS)—It is astonishing that the Washington Post should run exactly the same, lengthy "Fact Checker" column on two consecutive Sundays—Jan. 10 and Jan. 17—with no explanation, nor even a note on the fact that it was publishing the same version of this regular column twice. Will there perhaps be a third printing of it this coming Sunday?
But considering that the column getting such double play was an attempt to debunk the idea that the Glass-Steagall Act would have stopped Wall Street from causing the 2008 global financial crash; then it becomes clearer what the Post is up to.
This "Fact Checker" column, by regular author Glenn Kessler, was intended to disprove Sen. Bernie Sanders’ widely reported New York speech, asserting that Glass-Steagall would have stopped the big commercial bank holding companies from lending vast sums to "shadow banks"—hedge funds, investment banks, private equity funds, money market mutual funds, etc.—for securities speculation. It is widely known that the activities of those London and Wall Street "non-banks" triggered the crash by their wild securities and derivatives speculations. But Washington, corrupted by Wall Street money, is told by Obama, by Tim Geithner, et al. to accept the idea that since Glass-Steagall regulated and limited the activities of commercial banks, it would not have regulated or limited the deadly activities of these shadow banks. That requires believing the fairy tale, that commercial bank holding companies, post Glass-Steagall, did not move trillions of deposit money into securities speculation by and with "non-banks," blowing up the shadow bank sector until it was larger than the banking sector and totally entangled with it.
The repealed Glass-Steagall Act mandated the following regarding commercial banks and their holding companies:
[Sec. 3 (a)] Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of each of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions;... The chairman of the Federal Reserve Bank shall report to the Federal Reserve Board any such undue use of bank credit by any member bank...."
Kessler, "checking facts," seemed not to have checked this section. In his lengthy survey of opinions, he cited exactly one person actually familiar—from legal consulting for banks and hedge funds—with the operation of this Glass-Steagall mandate; James Rickards. Rickards’ experience is crystal clear: He wrote a Forbes column three years ago entitled, "Repealing Glass-Steagall Caused the 2008 Crash."
But Kessler instead ran through a whole series of Ivory Tower "authorities," arcane theorists of market economics, etc. to get to his assigned conclusion: Glass-Steagall would not have done much of anything.
Why run it two weeks in a row? Washington is hit by the national debate over Glass-Steagall. While Senator Sanders foolishly talks about doing it sometime after the new President takes office in 2017, the Post powers know the decision will come long before that, and they’re in Wall Street’s camp.