Glass Steagall Act

It looks like the Glass Steagall Act was originally in place for good reason. The Clinton administration and lobbyists worked to repeal this legislation, which created enough deregulation of the credit environment that led to the real estate boom from the early 1990s to now. Throw in Greenspan's low interest rates & no limits on how much investment banks could borrow, and yippee...everybody gets a home...now we're feeling the pain of this overblown growth that happened for nearly two decades. Credit companies levered up way too much. The approach worked as long as there were buyers of homes and mortgage-backed securities.

http://en.wikipedia.org/wiki/Glass-Steagall_Act

Everybody's talking about whether or not we should bail out these credit & insurance companies....of course we shouldn't, but this is again the wrong choice and only focuses on the resulting symptom rather than the underlying problem...the real problem behind this issue is how BOTH Democrats & Republicans were complicit in this whole debacle w/ lobbysists since the 1990s. Once the legislation was repealed, credit companies and investment banks ran w/ this new loose lending environment & began packaging worthless securities products (and the rating agencies began writing up bogus ratings to support these practices).

I hate to say it, but Washington AND Wall Street are both corrupt, and both Rep. & Dem. are still too afraid of losing power to say no to lobbyist requests. I don't see things changing any time soon. Politicians want the campaign dollars that these large companies provide...why else would Glass Steagal have been repealed?? It was obviously working to some extent.

I've just realized, for the 1st time in my life, how truly corrupt our government and financial system are. My prediction is that we'll create another gigantic piece of legislation like Sarbanes-Oxley that only drives more business to England and other countries and doesn't solve the heart of the issue (government & Wall Street lobbyist & campaign corruption).

We just needed to keep Glass Steagal in place (and modify it along the way)...it's that simple...now the resulting actions fo 'fix' the problem will likely be overblown, sort of like Sarbanes-Oxley...when will we ever learn that we only need 'just enough' regulation to get the job done, no more.

Also, this whole bailout mentality that the Bush administration now supports is very disturbing (and surprising) to me. I've been a Bush supporter through thick & thin, but I just can't support the extent of the bailouts. I can see saving GSAs Fannie & Freddie, but the other companies??

It's wishful thinking, but the leadership of these gigantic credit institutions should be prosecuted and forced to pay back at least part of the money they took to the bank. I don't believe this will happen...by attempting to prosecute the real offenders, the politicians would reveal their own dishonesty...by prosecuting the CEOs, politician's relationships to the lobbyists and others would be revealed.

v/r,
FMC (Free Mkt Capitalist)