Ennis' SR 8 - Urging Congress To Reinstate Glass-Steagall - Back In The News; Senate Banking Committee Chairman Bryan Townsend Responds

Letter to the editor ~ Stop big banks from scuttling Glass-Steagall again 

I had the opportunity to at­tend the Delaware Senate Bank­ing Committee hearing recently about Senate Resolution 8, a non­binding resolution from the Del­aware legislature addressed to our Democratic Congressman John Carney and Sens. Tom Carper and Chris Coons urging them to endorse House Resolu­tion 129 and Senate Bill 95, now pending in Washington, to rein­state Glass-Steagall, the “Re­turn to Prudent Banking Act.”

This act was originally en­acted under President Roose­velt to save the country from banking excesses. In 1998, Glass-Steagall was scuttled by former J.P. Morgan Board Mem­ber and then current Federal Reserve Chairman Allen Green­span and a deluded Congress that thought the banking indus­try would police itself. The com­mittee hearing in Dover was a frightening experience.

Representatives from big banks, such as J.P. Morgan-Chase, Bank of America and oth­ers, appeared to be making an effort to intimidate our senators by saying it would be unwise for Delaware to support such a posi­tion at this time. The raw power of big banking corporations was on display. They reminded ev­eryone that they control 26,000 jobs and more, and the inference was that these jobs might be on the line if our representatives dared to speak up again the big bank bailouts, and the looming danger under the Dodd-Frank Act, Title 2, suggesting that we will see a Cyprus-style confisca­tion of our money.

Ultimately, the mega-bank­ers had their way and SR 8 was not permitted to get out of com­mittee. In a rare display of bipar­tisanship, SR 8 is co-sponsored by both Democrats and Republi­cans. Let’s all join in this fight, and demand that Delaware’s representatives in Washington co-sponsor these urgent bills.

Michele C. Greene

Wilmington

With some comment rescues ~

  - - "They reminded everyone that they control 26,000 jobs and more, and the inference was that these jobs might be on the line if our representatives dared to speak up again the big bank bailouts" . . . these jobs are always on the line. Look at all the pink slips handed out at BofA in Delaware 2 weeks ago. Our politicians are weak & easily threatened by big money. They didn't get my votes that last time they ran for their offices & they will not be getting them the next time around. And I'll help others come to this realization. 

 - - Remember, this is your Government, not "theirs". Stop blaming "them". Become active. In the present climate of a do-nothing Congress people power is the only answer. Remember, do your duty. This is government OF THE PEOPLE, BY THE PEOPLE AND FOR THE PEOPLE. Get to work!

 - - Thank you for your clear and concise letter on the subject of Glass Steagal. You described the VRWC of wealth and high income at work. David Stockman recommended "Super Glass Steagal II" in chapter 34 of his new book, The Great Deformation: The Corruption of Capitalism in America. The book is of biblical proportion. The problem with the book is that it is not as clear and concise as Martin Luther's 95 theses that have been credited with the reformation of the catholic church. The reformation of America from the greatest debtor to the greatest creditor nation on earth will require all the effort that I, you, we can muster. 

  - - While I did not care for a lot of positions Alex Pires took in his campaign, he nailed this issue. Commercial and retail banks need to be separated again. It needs to be done to prevent banks from being too big to fail and having too much political clout. The services of each are distinct and the banks should be too. By 2008, we knew we had erred in 1998 and STILL we can't get a fix. Just another argument in favor of publicly funded elections. Bar all private and corporate donations. All of the sudden the politicians are accountable to the people instead of money. More than half of our elected officials' time is spent raising money instead of governing as it is now.

(News Journal) Wade Malcolm had the story ~ Del. bankers oppose support of Glass-Steagall

With the legislative session wrap­ping up July 1, a symbolic protest against financial regulation in the Delaware state Senate is now officially dead — at least for now. Sen. Bruce Ennis, D-Smyrna, offered Senate Resolution 8, which “urges the United States Congress to support efforts to reinstate the separation of commercial and investment banking functions in effect under the Glass-Steagall Act.”

As the resolution indicates, Glass-Steagall was a law that created a fire­wall between consumer banks and investment banking. It was essentially repealed in 1999 by the Gramm-Leach-Bliley Act. Some believe the change exacerbated or even caused the fi­nancial crisis in 2008. Banks, however, say the repeal of Glass-Steagall on the whole has improved access to credit and encouraged competition.

While the resolution would have no legal repercussions whatsoever, bankers still didn’t take it lying down. Two representatives of Bank of America registered with the Public Integrity Commission to lobby the measure — so did a lobbyist from JPMorgan Chase and The Delaware Bankers Association.

Similar resolutions have been in­troduced in 22 other states and have passed in four of them, but in the bank­ing industry hotbed of Delaware, it did not fare as well this time around. It was assigned to the Senate Bank Committee and went no further.

Senate Banking Committee Chairman Bryan Townsend wrote this when I asked for an update ~

SR8 was heard in the Banking Committee on Wednesday, June 19.  Two members of the committee were in attendance, due to overlaps with other committee hearings.  There was not a presentation of detailed financial, legal, and regulatory arguments or data.  Arguments and assertions were painted in broad strokes.  I subsequently have walked SR8 around to all committee members, and there have not been signatures to bring SR8 out of committee.  I cannot speak for other senators, but from my own perspective it is inaccurate to attribute the recent financial crisis to the 1999 repeal of Glass-Steagall.  There were far too many other unrelated factors post-1999---from the securitization of inappropriately-risked mortgages, to rapid growth in unregulated derivatives markets (including credit default swaps), to the increasing globalization and integration of financial markets and products---to blame the crisis on the 1999 repeal.  I support as much fluidity in financial markets as possible subject to appropriate risk-balancing and regulatory oversight.  Glass-Steagall was designed for a financial industry that we have long since outgrown.  Indeed, it is not entirely clear how much bite the law still had, when it was formally repealed in 1999.  I think there are more important topics and policy decisions to address moving forward, without harkening back to 1933.  Most importantly, we must find the right policies to encourage wealth-building financial activities that do not result in the same kind of taxpayer-bailout scenarios that were one of the hallmarks of the Great Recession.  My hope is that regulators in D.C. are given the authority and resources they need to keep us on a path of wealth-building that benefits society broadly.

My hope is that in 2014, concerned Delawareans can convince enough Senators to agree that SR 8 deserves a vote from the floor. It is not appropriate for the Senate Committee to hold this Resolution "hostage".

Meanwhile, lets pressure the Congressional Delegation to take this up in Washington.

Also read (2009) Glass-Steagall Act: The Senators And Economists Who Got It Right

~*~