Five years after the housing and financial meltdown, self-styled progressives are still peddling the Glass-Steagall pseudoexplanationPosted: October 14, 2013
One wonders if Warren et al. ever bother to look at the facts, particularly the passage of Glass-Steagall and what, if any, role the repeal actually played in the crisis. Since they never say anything specific, it’s hard to know if this is anything more than an incantation designed to blame the “free [sic] market” and to bolster their case for bureaucratic management of our lives (which they call “the economy”). It takes Herculean ignorance or dishonesty to claim that America had free banking before 2010. Hence, this is a classic confirmation of my observation that no matter how much the government controls the economic system, any problem will be blamed on whatever small zone of freedom remains.
According to folklore, Glass-Steagall was passed because of rampant conflict of interest and abuse among banks that both served savers and borrowers (commercial banking) and underwrote and sold securities (investment banking). But this is a case of the victors writing the history.