Bills to Restore Glass-Steagall Are Now in the Senate and the House: Americans Can Move Now to Crush Wall Street’s Power
By Nancy Spannaus, Editor, Executive Intelligence Review
May 29—On May 16, the 80th anniversary of the introduction of Franklin Roosevelt’s Glass-Steagall bill in the House of Representatives, Senator Tom Harkin (D-Ia) introduced S. 985, the Return to Prudent Banking Act, into the U.S. Senate. S. 985 is an almost precise replica of a bill already introduced into the House by Reps. Marcy Kaptur (D-OH) and Walter Jones (R-NC), HR 129, which currently has a total of 63 sponsors.
Senator Harkin’s action represents a major step forward in the fight to restore FDR’s Glass-Steagall, which the LaRouche political movement has been demanding since the fall of 2008, and which has taken on a head of steam among local constituency leaders, and even Congress over recent years. In 2010, the Senate was on the verge of passing an amendment to Dodd-Frank reinstituting Glass-Steagall standards of separating commercial and investment (gambling) banking. President Barack Obama and the Senate leadership refused to let the amendment come to a vote.
Then, in the 112th Congress, a bill introduced by Rep. Kaptur (the same as the one today), garnered 84 cosponsors in the House, but was never able to be introduced into the Senate, due to opposition by Wall St. and cowardice. That bill garnered widespread support throughout the nation, including institutions such as the AFL-CIO, state labor organizations, and city councils.
The current House bill was introduced by Kaptur and Jones on January 3, 2013, and has also rapidly gained support throughout the nation. As of this writing, Memorials demanding that Congress pass HR 129 have been introduced into 20 state legislatures, with much bipartisan support. Memorial resolutions have passed in four states: South Dakota (both houses); Maine (both houses); Indiana (house); and Alabama (house). More are on the way. In addition, city councils, the National Farmers Union, and dozens of state legislators have sent letters of support for the bill.
So have leading political and economic figures from Western Europe, where many understand that the reinstatement of Glass-Steagall banking separation in the U.S. is the necessary first step to their escape from financial tyranny, which is leading to outright genocide in places such as Greece.
Why is Glass-Steagall’s reintroduction so crucial?
As has been pointed out by numerous economists, the 1999 repeal of Glass-Steagall opened the flood-gates to the financial bubble which ultimately blew out in 2007-2008. This is documented in the 2011 Angelides report on the development of the crisis, and has been elaborated in great detail by FDIC vice-chairman Thomas Hoenig, a proponent of Glass-Steagall. The repeal basically opened up the entire commercial banking system for looting by the speculative bubble, including the skyrocketing growth of the derivatives markets.
With the bailout policies of the Bush and Obama administrations, the gambling banks were put on life support, and continue to be there, through the Quantitative Easing policies of the Federal Reserve. The excuse that the bailout and easy money are needed to aid lending into the real economy is just that—figures show that bank lending has actually declined since 2008.
The starting point of any solution is to cut off the life-support for Wall Street by separating the banks, meaning that no more government funds go to support the gambling banks. That includes derivatives—which, under Dodd-Frank and the G-20 “bank resolution” policies of the entire trans-Atlantic region, are given priority because their failure would “destabilize” the financial system.
The current system of looting the living standards of Americans, and others, needs to be destabilized. With the wiping out of fictional values, thanks to lack of support from the government (or depositors ala the Cyprus model), many banks will be undercapitalized, but this can be remedied, as under FDR, with the extension of government credit for physical economic projects so desperately needed. Frankly, all these financial obligations, built up by gambling, can’t be saved without sacrificing millions of people’s lives—genocide. That’s unacceptable, and our history, from Alexander Hamilton to Abraham Lincoln to FDR, is replete with examples of the Constitutionally based alternative of a credit system based on economic and technological progress.
Complaining about the current economic injustices in the U.S., and elsewhere, is an impotent gesture, when a potent weapon is at hand to deal a crippling blow to the financial power of Wall Street, and its associated London financiers. Indeed, knowledgeable insiders report that the current financial bubble is on the edge of blowing out again! It’s time to strike now, by demanding Congress pass Glass-Steagall, and Barack Obama either sign it into law, or get out of the way.
Liam Halligan Says In American “The Glass-Steagall Debate Is Live”
June 3rd, 2013 • 8:25 AM
In a June 1 article in the Daily Telegraph headlined, “Lack of genuine reform is sowing seeds of next crisis,”  Halligan — who has repeatedly pushed Glass-Steagall — reported on the fact that “draft legislation to restore Glass-Steagall has just been introduced in the U.S. Senate. This is a companion bill to a measure in the House of Representatives that now has 63 sponsors. Over in America, the Glass-Steagall debate is live.” Halligan not only reports on this key development, which most major media have studiously blacked out, but he again comes out swinging for the needed policy shift, noting that “in the U.S., the debate on Glass-Steagall is now shifting,” and that voices in the UK also need to speak out, “and soon..”
“For many years, this column has banged the drum for the U.S. in particular, but also the UK and Western Europe, to re-impose a decisive split between commercial banks (that take deposits and lend to ordinary firms and households) and investment banks (which take big risks)…
“Those of us who called for a new Glass-Steagall back in the immediate aftermath of the sub-prime crisis were often derided. Yet numerous very serious people have emerged as strong supporters of this view. Outgoing Bank of England Governor, Sir Mervyn King, backs re-imposing a genuine divide. So does former Federal Reserve boss Paul Volcker and former UK chancellor Lord Lawson. Even John Reed and Sandy Weill, the two Wall Street plutocrats who made vast fortunes off the back of the Clinton-era repeal, now admit that dismantling Glass-Steagall was wrong…
“Sick of market instability, America’s mighty farming lobby last week called for a new Glass-Steagall . ‘Congress must learn from the past in order to prevent future financial crises,’ said Roger Johnson, president of the U.S. National Farmers Union. We’ve also lately had a courageous set of statements from an economist called Jeff Sachs…
“So, in the U.S., the debate on Glass-Steagall is now shifting. Here in the UK, our ‘Vickers reforms’ … are a deeply inadequate response to our current predicament. While some UK authority figures have spoken out, I know for a fact that there are many, many more. They need to find their voice — and soon.”
“Treason! Playing Suicide Card with Dodd-Frank Bill”
June 3rd, 2013 • 8:16 AM
Examiner.com published a new article by Kenric Ward,  under the above title, on June 1. The story, based on an LPAC press release, begins:
“Implementation of the Dodd-Frank financial act will set up massive raids on U.S. bank deposits and ultimately lead to American ‘genocide,’ a new report predicts. ‘This is not some wild futuristic nightmare, says LaRouche PAC, headed by former presidential candidate Lyndon LaRouche.’”
The Kenric Ward article reviews the provisions of Dodd-Frank allowing for seizing deposits, it references Cyprus, quotes LaRouche on $1.6 quadrillion in derivatives which must be covered, discusses how Citigroup wrote HR992 (the swaps bill implementing Dodd-Frank), and describes the need for the restoration of Glass-Steagall. It links to the previous Examiner article on Harkin filing the Senate Glass-Steagall bill, and it quotes LaRouche again: “‘The looting has gone far enough,’ LaRouche said. ‘The Dodd-Frank bill is a piece of treachery that has already claimed the lives of too many of our citizens, through the destruction of our economy, the continuing collapse of real employment, the gutting of our health-care system. Nothing short of the full reinstatement of Glass-Steagall can save the United States at this point in time.’”
The article page also features a video “Why Dodd-Frank is Unconstitutional,” which is an interview with Wall Street Journal assistant editorial page editor James Freeman on the lawsuit against Dodd-Frank law brought by the Competitive Enterprise Institute.
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