Hillary Clinton's Glass-Steagall

[rpannier]

Hillary Clinton won't propose reinstating a bank break-up law known as the Glass-Steagall Act -- at least according to Alan Blinder, an economist who has been advising Clinton's campaign. "You're not going to see Glass-Steagall," Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall

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It's a mistake politically because people who believe Hillary Clinton is still too close to Wall Street will not be reassured by her position on Glass-Steagall. Many will recall that her husband led the way to repealing Glass Steagall in 1999 at the request of the big Wall Street banks.

It's a big mistake economically because the repeal of Glass-Steagall led directly to the 2008 Wall Street crash, and without it we're in danger of another one.

Some background: During the Roaring Twenties, so much money could be made by speculating on shares of stock that several big Wall Street banks began selling stock along side their traditional banking services like taking in deposits and making loans.

Some banks went further -- lending money to pools of speculators that used it to pump up share prices. The banks sold the shares to their customers, only to have the share prices collapse when the speculators dumped them.

link
http://www.huffingtonpost.com/robert-reich/hillary-clintons-glass-steagall_b_7798344.html