Reich Takes Dodd To Task:
Glass-Steagall Is Necessary
April 21, 2010 (EIRNS)Calling Senate Banking Committee Chris Dodd's so-called Wall Street reform legislation "a very small step," former Labor Secretary Robert Reich says the Glass-Steagall repeal of 1999 has to be reversed.
In a syndicated column today, Reich demands.
Resurrect the Glass-Steagall Act in its entirety so commercial banks are separated from investment banks. The current bill doesn't go nearly far enough. Commercial banks should take deposits and lend money. Investment banks should be limited to the casino we call the stock market, helping companies issue new issues and making bets. Nothing good comes of mixing the two. We learned this after the Great Crash of 1929, and then forgot it in 1999 when Congress allowed financial supermarkets to do both.
Reich's other demands are for breaking up banks of over $100 billion in assets; and requiring all derivatives to be traded on clearinghouses or exchanges.