Glass-Steagall Moves to the Forefront Internationally
July 26, 2016 (EIRNS)—In the wake of the adoption of planks in favor of Glass-Steagall banking separation in both the Democratic and Republican Party platforms, there is a growing sense that the FDR-era law is very likely to be passed in the near future. On both sides of the Atlantic, the drumbeat in favor of the legislation, which has been a leading campaign by the LaRouche movement since the fall of 2008.
On July 22, the leading financial newspaper on the European continent, Handelsblatt, published an article by its Washington correspondent entitled “Separate What Does Not Belong Together,” which led off with the report of the Republican Party platform’s inclusion of the plank. Handelsblatt’s Frank Wiebe writes that
“the bank separation concept would probably make the financial system safer. The decisive point is that large banks are too large and a separation would make them smaller again. The argument is valid for Europe, where very large banks sit in relative[ly] small states, even more than for the USA. The Deutsche Bank business model, where a large investment bank sits on the foundations of a not too strong traditional bank is being discussed over and over again.”
In the United States, the apparent inevitability of the re-enactment of Glass-Steagall is also increasingly discussed. Take Elaine Kamarck, a Clinton Democratic superdelegate and top campaign consultant. She wrote July 25 that
“by agreeing to place reinstatement of Glass-Steagall in the Democratic platform, Hillary Clinton signaled that she too would support it.... To date there hasn’t been much interest in this in Congress. But if the establishment heard one thing loud and clear in the 2016 primaries, it was that millions of Americans think that they were the victims of Wall Street and that the next president had better pay attention.”
The strong support for restoring Glass-Steagall among Democrats was reflected in the fact that Bernie Sanders stressed it in his Democratic National Convention speech July 25.
Then there’s CNBC. On July 26 it published an article on “Why Big Banks Could Be Broken Up No Matter Who Wins the White House,” featuring the same Keefe Bruyett & Woods investment bank analyst Brian Gardner whose warning last week that Wall Street should not dismiss the potential for GS to actually be passed was much reported after the Republican Party Convention. He adds to what he said last week:
“We’re now pretty sure we’re going to have a very close presidential election. I think a few weeks ago people thought Clinton would win this easily and Trump could implode and that would take down House Republicans. That now seems a remote possibility. Now the more likely build up a police state as Turkish President Erdogan is doing, and unacceptable to cooperate with precisely those countries whose role has been highlighted in the Chilcot Report and the 28 pages.”
‘We’re going to go have a closely divided Congress and we’re going to have a president who in order to get anything done is going to have to negotiate.... In that kind of environment, people are foolish to dismiss the reintroduction of Glass-Steagall.”
There is already a strong base in Congress for action on Glass-Steagall. More than 80 Congressmen, including some Republicans, have signed on to Rep. Marcy Kaptur’s HR 381, which would restore Glass-Steagall, and at least a tenth of the Senate has signed on to Sen. Elizabeth Warren’s 21st Century Glass-Steagall Act.