October 20, 2011

Why Dems can't be the pro-#OWS party - #Glass-Steagall

Barney Frank, not quite so liberal
It's simple. Nearly 15 years ago, more than half of House Democrats voted to repeal the Glass-Steagall Act and replace it with Gramm-Leach-Bliley. This breaking down of banking walls between commercial and investment banking may have been a major cause of the financial meltdown a decade later, as the Wikipedia article linked above notes. (Those who claim it wasn't are basically Republicans and neolib Dems! Actual liberals, along with a certain percentage of libertarians, believe it was a cause.)

Anyway ...

On the House side, all these "liberal" Democrats voted for the replacement/overthrow of Glass-Steagall:
Nancy Pelosi, Brad Sherman, Howard Berman, Loretta Sanchez, Mark Udall, Ben Cardin, Steny Hoyer, Elijah Cummings, Sander Levin, James Oberstar, Debbie Stabenow, Dick Gephardt, Rush Holt, Bob Menendez, Tom Udall, Jerry Nadler, Charles Rangel, Nita Lowey, Louise Slaughter, Mel Watt, Sherrod Brown, Deborah Price, Patrick Kennedy, Jim Clyburn, Lloyd Doggett, Ruben Hinojosa, Eddie Bernice Johnson, Solomon Ortiz, Silvestre Reyes, Martin Frost, Norman Dicks.
On the Senate side, the original vote was pretty much party line. BUT ... on the final vote, after a House-Senate conference, only eight Dems still voted no.

The yes voters for Gramm-Leach-Bliley include
Tom Daschle, Kent Conrad, Chris Dodd, Dick Durbin, Dianne Feinstein, Ted Kennedy, John Kerry, Pat Leahy, Patty Murray, Harry Reid, Paul Sarbanes and Ron Wyden.
And, in the final "procedural" vote on the House side, actually, 3/4 of Dems joined the Wall Street rush.

And, not all Democrats who voted against GLB actually opposed it in reality. Take Barney Frank, another alleged liberal. 2010 primary challenger, Rachel Brown, points that out:
He did vote against it, but not because of the repeal of Glass-Steagall, which his own statements from the time show. The truth is, as he stated on the floor of the Congress in July 1999 , he fully supported the repeal of Glass-Steagall and its separation of commercial from investment banking, declaring that, "It is a good piece of legislation for setting forth the conditions for the financial services industry," and that, "It does a very good job of creating the conditions in which the capitalist institutions can flourish, and that is a good thing." Frank emphasized, "We want capital to move freely. We gave the financial institutions everything they have asked for."
(This is in no way to imply any sort of endorsement of Brown, an obvious Larouchite.)

But, Barney Frank is no enemy of Wall Street, not even close. He wasn't really back then, and, as the link notes, he certainly isn't today. Above all, he's a friend of hedge funders and their below-income-level tax rates.

Oh, contrary to people who say this is all hindsight, nope. Only after some cosmetic safeguards were passed did a bunch of money-hungry Democratic senators jump on.

But, it's not hindsight in another way. Before this, the Clinton Administration had backed other relaxation of financial standards; the breach in the wall between commercial and investment banking happened earlier in Clinton's administration, also with largely bipartisan support, but warnings as well.

And, the fact that I'm focusing on legislative branch elected representatives is by no means to overlook the role of the likes of Robert Rubin and Larry Summers.

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