Bring On Glass-Steagall

Hillary Clinton’s official entry into the Presidential race has only stepped up the national drumbeat for a real Democratic presidential candidate, one with the guts and commitment to take on Wall Street and reinstate Glass-Steagall. Former Maryland Governor Martin O’Malley’s campaign put FDR’s Glass-Steagall back onto the national political agenda, and Wall Street has yet to roll that back.

Sen. Elizabeth Warren today broke months of noticeable silence on Glass-Steagall, putting the need to restore that law back up front in her address on “The Unfinished Business of Financial Reform,” delivered to a Levy Institute conference in Washington, D.C. Three steps adopted by the government in the Wall Street Crash of 1929 worked for half a century, until they were blown away by the political wind of deregulation, she stated from the outset: establishing the SEC, the FDIC, and “a clear division between deposit-taking institutions and investment banks —the Glass-Steagal Act—so that banks couldn’t use government- guaranteed deposits for high-risk speculation.” The biggest banks must be broken up, and “there are two structural ways to do this: We can cap the size of the biggest financial institutions… And we can adopt a 21st-Century Glass-Steagall Act that rebuilds the wall between commercial banking and investment banking,” she said, referencing the bill she had introduced in the last session with three co-sponsors.

Bart Naylor, Financial Policy Advocate for the progressive lobbying group, Public Citizen, another Glass-Steagall supporter who had been silent on it for months, also jumped back in the fight. Corporate Crime Reporter wrote in introducing its interview with Naylor published on April 14:

“According to Naylor, there are two main issues today in D.C. concerning Wall Street and the Big Banks: too big to fail and too big to jail…. And there is a solution: bring back Glass-Steagall and impose a hard cap on the size of banks. If you could take “Big Money” out of the mix, all of this legislation would pass, based on its merits. I don’t know how Glass-Steagall would do in a vote today, if for some reason there was open voting on the Senate floor.”

Naylor cited the 100 co-sponsors on Marcy Kaptur’s bill to restore Glass-Steagall in the last session, and the 10 co-sponsors on Elizabeth Warren’s similar Senate bill.

Former Bill Clinton Labor Secretary Robert Reich writes in his latest syndicated column, that Glass-Steagall is the leading issue which Hillary has to take up, if she wants to win the trust of voters:

“If she is to get the mandate she needs for America to get back on track, she will have to be clear with the American people … she’ll need to admit that Wall Street is still running much of the economy, and still out of control. So we must resurrect the Glass-Steagall Act and bust up the biggest banks, so millions of Americans don’t ever again lose their homes, jobs and savings because of Wall Street’s excesses.”

Los Angeles Times columnist Doyle McManus today, and editor of The Nation Katrina van den Heuvel in her April 14 Washington Post column, argue that there will be “a vigorous debate in the Democratic presidential primary campaign,” not over who the nominee should be, but “what it means to be a Democrat in 2016 and what message the party should take into the general election fight,” as McManus put it. Both writers put “breaking up big banks and restoring the Glass-Steagall Act” at the lead of that message, as O’Malley has done.