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New York Times Hysteria over Glass-Steagall Momentum

April 22, 2017 (EIRNS)—Under the headline, "Bring Back Glass-Steagall?—Goldman Sachs Would Love That," New York Times journalist William Cohan yesterday wrote that

"Among the many silly ideas floating around Washington these days about how to re-regulate Wall Street is that old chestnut about separating investment banking from commercial banking."

While repeating the tired line that the 2008 crash had nothing to do with the takedown of Glass-Steagall, Cohan reaches deep into the fantasy world to come up with another excuse, declaring the whole thing to be a Goldman Sachs plot. After all, he notes, the investment banks that were "saved" by the Wall Street "too big to fail" banks—Bear Stearns by JP Morgan and Merrill Lynch by Bank of America—would have to spend billions to unwind their investment banking from their commercial banking under a Glass-Steagall regime, but Goldman never merged with any commercial bank and would get off without any pain.

Referencing Gary Cohn (the head of Trump’s National Economic Council and former CEO of Goldman) who responded positively to Sen. Elizabeth Warren’s question regarding the Trump administration’s support for Glass-Steagall, Cohan writes:

"What better way for Mr. Cohn to repay his former colleagues than by endorsing a plan that would virtually eliminate Goldman’s remaining competitors and cause them to spend years, and billions of dollars, going down the rabbit hole of separating their commercial and investment banking businesses? Goldman Sachs would love nothing more than a return to a form of Glass-Steagall."

Cohan admits that the problem on Wall Street is that "people are rewarded for taking big risks with other people’s money," but pretends Glass-Steagall wouldn’t affect that, while arguing that "the big Wall Street banks are global leaders and the envy of competitors—especially in Western Europe and in Asia."

The conclusion of this foolish diatribe: "The crafty Mr. Cohn is playing the senior senator from Massachusetts for the fool."