1-25-16 – Bernie and Glass Steagall

by John McClaughry

Anyone who has listened to Bernie Sanders for the past eight years has heard him rant against the “repeal” of the Glass Steagall Act, to which he attributes the whole financial crash of 2008. That act, enacted in 1933, prohibited deposit banks from engaging in riskier investment banking, and contrary to Bernie, it still does.

Bernie either has no idea of what the alleged repeal of Glass Steagall in 1999 actually did, or he doesn’t care so long as he can rant about something fictitious that advances his political standing.

Finally, liberal writers are starting to beat up on Bernie on this, because he’s now targeting their favorite candidate Hillary Clinton, whose husband signed the 1999 bill.

The pro-Hillary Catherine Rampell of the Washington Post writes “This debate over Glass-Steagall needs to die already….[Democratic politicians] have brought it up at every debate and expounded on it on the trail. It’s become the left’s litmus test for whether a politician is “tough” on Wall Street. But Glass-Steagall had nothing to do with the 2008 financial crisis. It’s a distraction from the reforms we still need to prevent the next one.”

She explains that ”if the repealed provisions of Glass-Steagall had still been on the books, almost none of the institutions at the epicenter of the crisis would have been covered by it…. Glass-Steagall, or the lack thereof, is a red herring.” I might add, Bernie’s continued ranting about Glass Steagall is totally dishonest.

– John McClaughry is the founder and vice president of the Ethan Institute

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