Bernanke: Don’t Do Glass-Steagall; You’ll Shut Down Wall Street

Speaking at an interview staged by Politico Oct. 20, former Fed chief helicopter-money man Ben Bernanke said that passing a new Glass-Steagall Act would shut down Wall Street, in effect. The man who bailed out Wall Street and London megabanks with Garagantuan “excess bank reserve creation” programs starting in early 2007 and continuing through 2014, said he was “puzzled” that Democratic candidates for President would want to end these bailouts by restoring Glass-Steagall. Bernanke himself made clear that he does not want Wall Street shut down (nor the real U.S. economy restarted).

Bernanke’s interview was conducted by Ben White of Politico at an event called “Fiscal Future” sponsored by that news service; and Politico headlined his opposition to Glass-Steagall in its coverage of the interview on Oct. 21.

After registering his disapproving puzzlement at Gov. Martin O’Malley’s and others’ “focus on that particular provision [glass-steagall],” Bernanke proceeded to run through a memorized boilerplate of London’s falsehoods about Glass-Steagall and the 2007-08 crash. These lies are by now so standardized, that they are passed out on cue cards from the Obama White House and Treasury to all aspiring political whores who come to Washington; some reports say junior high school students around the Capital must pass tests on them.

Bernanke’s ability to repeat these falsehoods certainly was not worth the quarter-million dollars he was probably paid for the appearance.

But he did then get to what he knows himself, particularly from ordering Bank of America to buy Merrill Lynch and take over its derivatives, ordering AIG to pay off Goldman Sachs’s derivatives at 100% with taxpayers’ money, etc., in 2008.

That is, if we break up the megabanks with Glass-Steagall, exposing the securities and derivatives trading of each of their thousands of subsidiaries, the vast majority of those subsidiaries will be found to be bankrupt, worthless without the backing of commercial-bank deposits.

Thus, we will shut down Wall Street. “Just breaking them into tiny little pieces, you’re going to lose a lot of value if you do that, without thinking about what the economics is,” was how Bernanke put it.

“The economics” of Bailout Ben have the U.S. economy and workforce still in a collapse seven years after the bank panic. EIR Founding Editor Lyndon LaRouche’s proposal, precisely to break them up into pieces and shut the Wall Street bankrupts down, allows national credit policies to be started to restore the productivity and livelihood of that workforce.