You're viewing part of a thread.
I have actually never heard this argument.
The way I understand it is glass steagalls main role was to limit bank investments. I have read that Clinton repealled because it allowed for global markets to start. Then we started getting banks overspeculating and the eventual bubble of 2008. This then prompted the fangless Dodd Frank act to go through but it didnt stop banks from acting as their own insurance anyway when silicon valley thing happened this year.
Thats how I know it. If you have sources otherwise my infant brain would love to know.
The history of glass steaguall is not really an argument including it being limited way before its demise in the 90's. Since its not an appeal to authority here https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation#Decline_and_repeal
What you have shows that they found a supposed "loophole" but there is some problems with that. It was basically not applicable to most banks until the repeal of glass steagall. Frank-Dodd even tried to save pieces as a result of the 2008 crisis. Below are sections within glass steagall that were repealled.
Section 16 -
This section sets out the permissible securities activities of national banks (12 U.S.C. § 24 (Seventh)). No bank covered by Section 16's prohibitions could buy, sell, underwrite, or distribute any security except as specifically permitted by Section 16. It prohibits banks from being a "market maker" or otherwise "dealing" in non-government (i.e., "bank-ineligible") securities.
Section 20-
This section prohibited member banks from affiliating with firms engaged principally in securities activities (formerly codified at 12 U.S.C § 377). Section 20 only prohibited a bank from affiliating with a firm "engaged principally" in underwriting, distributing, or dealing in securities.
Section 32-
This section prohibited officer, director, and employee interlocks between member banks and securities firms (formerly codified at 12 U.S.C § 78). Under Section 32, a bank could not share employees or directors with a company "primarily engaged" in underwriting, distributing, or dealing in securities.
The Gramm-Leach-Bliley Act of 1999 (GLBA) repealed Sections 20 and 32. Sections 16 and 21 remained in effect until Clinton signed the repeal 8 days after GLBA took effect. Since its repeal, these sections have been tried to be reinstated in an attempt to seperate commercial banking from investment banking.
The Dodd-Frank Act had the Volcker rule (§ 619), which was an attempt to reinstate only a part of glass steagall (section 20). This rule essentially limited proprietary trading by banks and their affiliates to stop speculative trading. This is all we have now and apponents to the glass steagall sections also say we should have had something planned as a replacement.. but we didnt. If you think we were toothless back then, you can assume we are 100% toothless now.
Too lazy to link sources.
This would make sense as globilization while going on since ww2 ended accelerated in the 80's. Once the provisions there were eliminated it would effectively allow banks to offshore the activity anyway which made just eliminating it in the 90's to make more sense. Since they were effectively doing it anyway.
My problem is that now we dont have the provisions which allows things like the citadel/robinhood fiasco, FTX crypto speculation or the 2008 crash. Saying that it would had happened because of Reagan is just not true.
but deregulation and anti regulation as a pattern. As a driving force of the right. That came from him. It certainly would not have happened if regulation was considered an important part of capitalism that while it may need to be tweaked sometimes should never be removed and new regulation should follow for new things. The whole way of doing things started under reagan and the attitude to not follow the correct path very much starts there.
That just sounds like you are trying to look for a reason. Do you want to ignore 20 years of politics to steagall repeal or the 20 years since that? Im pretty sure the house has flipped about 4 or 5 times since then.. why havent we given banks stricter rules yet even though the house has been a democratic super majority 7 times since reagan? In fact, i just looked it up and the house was a democratic majority the entire time Reagan was president. It was only up until Clinton in 97 that it switched to a republican super majority..
Anyone with even an ounce of knowledge of how congress works and our history would know that its way easier to block legislation than enact it and republicans are known for blocking essentially everything. A majority is not enough if the oppositions only agenda is to block it, which is what they had despite your use of the term super majority which would be the case if they controlled 2/3rds of congress which was not the case. Its part of the weakness of our system that the republicans exploit liberally (I know. ironic use of adjective there.). The republicans have been in the minority even when they have had congressional majorities and when they have had the house but again that is due to anti democratic aspects of our system of government. So im ignoring nothing but you are not really saying anything either with this last comment.
All i meant by what I said was that congress is the one who makes the legislation. People can blame Reagan all day but he was in a democratic house majority that spanned 10 years after he left. It would be akin to republicans blaming Obama for actions taken by todays congress.
reagans terms redefined the rebuplican agenda from the time before him. Starve the beast, the two santas, supply side exconomics, voodoo economics, laffer curve. This all came out of his administration and set the path forward. There has been little deviation since from the republicans. If anything just doubling down on the worst aspects.
Again, you are turning Reagan into a scarecrow. You are taking away responsibility from all the legislation, all the economists surrounding, all the people who voted... you are assuming the democrats absorbed all of his agenda and applied it to their platform especially when they has a super majority.
You are also assuming that we were just as partisan 40 years ago when that is not the case. We did not have hyper partisan politics until ~9/11 with Bush.