In my conversation with Ms. Warren she told me that one of the reasons she’s been pushing reinstating Glass-Steagall — even if it wouldn’t have prevented the financial crisis — is that it is an easy issue for the public to understand and “you can build public attention behind.”And yet, here she is in July 2015 introducing the 21st Century Glass-Steagall Act on the Senate floor using all the scary things that happened during the financial crisis as a backdrop.
She added that she considers Glass-Steagall more of a symbol of what needs to happen to regulations than the specifics related to the act itself.
We also know that reinstating Glass-Steagall is one of the five things she prioritized for Wall Street reform. One has to wonder if anything else on that list is "more of a symbol."
But perhaps most importantly, during the Democratic debate, both Sanders and O'Malley jumped all over Hillary Clinton for not including the reinstatement of Glass-Steagall as part of her own proposal for Wall Street reform. That's what happens when the patron-saint of "populist anger" toys with the public by using symbols to ratchet up an emotional reaction.
The basis for much of Elizabeth Warren's appeal has always been that she is both smart and sincere. This is the kind of thing that calls one or both of those things into question.
I hope she never runs for President, it will be very painful for PUBs
ReplyDeleteNo one has to fear Warren ever running for Prez. She's a one-trick-pony built on public fears about the financial crisis.
DeleteGlad you brought this up!
ReplyDeleteI don't mind using Glass-Steagall as shorthand for the types of legislation we need, and I like to think Warren generally means it in that sense. That said, too many people have this simplistic recipe in their minds that Glass-Steagall fixes everything, and no it really doesn't.
I still like Hillary's idea of attacking not bank size and not risk, but the COMBINATION of size and risk: for banks with assets over $50 million, collect a fee on risky investments. That way large institutions are encouraged to stick with safe investments, either that or else put some money in the kitty in case they need bailing out later. Basically, your bank can either take risks or it can grow large, decide which of the two you want. Like the best of progressive legislation that is practical and achievable, it doesn't require an overhaul of the system, just the addition of a strategically-placed rule.
I kindof liked EW in the early stages. And you wonder why PBO didn't nominate her as part of the new agency that was started. She reminds me of Sanders, all fire, although she is (hopefully) smarter than he is and can actually come up with practical solutions. It looks like she is taking lessons from the GOP on scare tactics and BS.
ReplyDeleteHe did nominate her - Congress refused to confirm her. But since becoming a Senator, she's taken leave of her rationality and turned to hyperbole. G-S actually did very little, but it would have stabilized PART of the banking stability as the Volcker Rule now does. By putting a firewall between our deposits and money used for risky investments for the bank itself, there would be no justification for Bush and Paulsen to have insisted on bail outs. OUR money would be safe. The fact PBO converted the "bail out" to loans that had to be repaid w interest was another stabilizing factor - the banks otherwise would have appropriated the funds but left ours to FIDC. She uses the G-S in error, too - it was named for two now dead Senators, and there is no way to 'reinstate' it. The Volcker Rule does most of the job and any future legislation would be named for...her? G-S never controlled Wall St. investments - most did not exist in the 30s. So that is the work of Dodd Frank that now could be expanded w a decent Congress. But she's not helping by focusing limited minds on this one rule. People hop on it because they know little else. What happened at Bear Stearns and Lehmann Brothers had zero to do with G-S or the banking crisis overall. I'm not happy she is pandering to those little minds. It's not good work on her part.
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