McCain and Cantwell propose resurrecting Glass-Steagall to break up Wall Street

[babylonsister]

An Odd Post-Crash Couple

Spurning Obama, McCain and Cantwell propose resurrecting Glass-Steagall to break up Wall Street.

By Michael Hirsh | Newsweek Web Exclusive
Dec 15, 2009



John McCain lost the 2008 presidential election because of the financial crisis—at least that's what his chief strategist, Steve Schmidt, suggested. "We were three points ahead on Sept. 15 when the stock market crashed. And then the election was over," Schmidt said in a postmortem earlier this year. McCain was tarred with the regulatory failures of the Bush years, and it didn't help that he had been a longtime acolyte of the Senate's dean of deregulation, Phil Gramm, who once derided Americans as "a nation of whiners." McCain also seemed to have few new ideas of his own about how to address the financial panic.

More than a year after the election, the Arizona Republican is looking to repair that reputation by joining up with Democratic firebrand Maria Cantwell to propose something that will be anathema to both Wall Street and the Obama administration. According to two congressional sources, the two maverick senators want to reinstate Glass-Steagall Act, the Depression-era law that forced the separation of regular commercial banking from Wall Street investment banking. The senators' proposal echoes a failed amendment introduced in the House last week by Rep. Maurice Hinchey of New York.

The Senate prospects for the success of the McCain-Cantwell bill—which the two plan to announce together on Wednesday morning—seem bleak at best. But McCain and Cantwell join a still small but not insignificant insurgency of chronic doubters, including former Federal Reserve chairman Paul Volcker, who say not nearly enough is being done to change Wall Street and, in particular, to address the "too big to fail" problem. The issue is one of the few in Washington that can unite the left and right sides of the political spectrum. Democrats like Cantwell deplore Wall Street's outsize role in the real economy and its lobbying influence, and conservatives such as McCain are appalled at the way the market system has been undermined—some would say rigged—by the power of the big banks.

more...

http://www.newsweek.com/id/226938

[WCGreen]

1. This would be a great first step back to the sanity of markets...

[Sebastian Doyle]

2. Now there's a serious shock

And I don't just mean Grandpa Simpson either.

Hopefully though between the two of them they can get enough Repukes and DLC'ers on board to override the banking shills who will vote against it.

[MrCoffee]

3. Please please pretty please let it be so!

[andym]

4. Biparitsan support means it could happen. nt.

[Mojambo]

5. Good for them.

I can't believe that less than two years later I may find myself siding WITH John McCain and against Barack Obama.

[JuniperLea]

6. Best news in a long time...

I can't believe McCain supports this! But I'll support him in it!

Wow... what a day... I think I just got whiplash!

[TheBigotBasher]

11. To be fair I can

his campaign was nuts because it was run by the new GOP. A rag bag of irrational God Bothering racists and err not much else.

McCain pre 2008 was always quite reasonable for a GOP Senator. It is why the GOP hate him.

[MrCoffee]

13. Bingo

That's exactly why they hate him. As soon as he was nominated, the election was over.

[JuniperLea]

16. That makes a lot of sense...

Thanks! I can easily see from that perspective.

[midnight]

7. Let's get it done.

[uponit7771]

8. Yeap, crash the markes right before the 2012 election. Sorry Obama, you should've pushed in May and

...the effects would be over by now.

[bluestateguy]

9. I'm on board

nt

[OnceUponTimeOnTheNet]

10. My jaw just hit the floor... gotta go collect it.

I had just wrote my congressman to reinstate this law due another thread in DU Economy tonight.
rec.

[Proud Liberal Dem]

12. Wow! McCain?!

:wow:

I think that my head just hit my desk!

:thumbsup:

[optimator]

14. it would be so full of loopholes

if it passed, which it has no chance in hell of actually passing.

[JamesA1102]

15. Why does Newsweek print Schimdt's lie.

This has been a GOP talking point. McCain was not 3 points ahead on September 15th. He got a bump after the convention but he was already sliding and Obama had pulled ahead in almost every poll by then. Yet Newsweek prints Schimdt's quote as if it were the truth.

[polichick]

17. It's what the prez should be proposing. nt

[bluethruandthru]

18. This would be great....

Amazing how it's coming partly from McCain!