Economics Government Justice

Sens. Elizabeth Warren and John McCain Reintroduce Bill to Break Up Mega Banks, The Glass-Steagall Act Revived

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The Glass-Steagall Act, the Depression era bill which forces big banks to split their investment and commercial banking practices is being revived by Sens. Elizabeth Warren and John McCain. At least they are trying to revive it!

The act was first passed in 1933 toward the end of the Great Depression in an effort to rein in what was widely viewed as predatory and risky bank behaviors that led to America’s worst economic crash.

The result: decades of perceived banking stability and no more Great Depressions.

But back in 1999 bankers, Wallstreet and the wealthiest money men were able to repeal the law. The act that repealed the Glass-Stegall was the Gramm-Leach-Bliley Act.

And as anticipated it happened again… In 2007-2008 the nation experienced the Great Recession.

Derivatives, selling our mortgages to off shore companies and other exotic financial constructs and hundreds of other secret and not so secret practices all fueled the second Great financial collapse.

The world is awakening, many Senators like Ron and Rand Paul, Bernie Sanders and more are starting to beat the drum to pull down the Mega Banks and their corrupted destructive practices. Senators Warren and McCain, along with cosponsors, Sens. Angus King and Maria Cantwell are just a few more that are trying to do something about an out of control financial system. They had this to say in a recent statement, “the legislation would make big banks that are “too big to fail” smaller and safer and minimize the likelihood of a government (.e.g, taxpayer) bailout.”

“Despite the progress we’ve made since 2008, the biggest banks continue to threaten our economy,” said Warren, a long time Wall Street critic, in a statement. “The biggest banks are collectively much larger than they were before the crisis (Great Recession), and they continue to engage in dangerous practices that could once again crash our economy.”

Sen. McCain; “The repeal of Glass-Steagall led to a culture of dangerous greed and excessive risk-taking in the banking industry. Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits,” McCain said in a statement.

in 2008, U.S. taxpayers bailed out the big Wall Street banks with 00 billion of their money.

“In 2009 Wall Street was having its best year ever and was handing out billions of dollars in bonuses to executives while millions of Americans were out of work and losing their homes in the depths of the Great Recession.”

In 2009, one out of four homeowners was “under water” with their home mortgage and millions lost their homes and jobs.

In 2009, former U.S. Labor Secretary Robert Reich wrote that the scourge of unemployment had split America into three groups:

*(1) Households in danger of losing their homes and whose kids are surviving on food stamps (that’s up to one in four children in America today);
*(2) The vast majority of Americans who are managing but worried about keeping their jobs and homes;
*(3) A small number who are taking home even more winnings than they did in the boom year 2007.

Wall Street bankers were the majority inside of category 3.

And the bonuses continue while America continues to crumble.
*Goldman Sachs preparing to give out bonuses in a few weeks totaling 7 billion.
*JPMorgan Chase bonus pool is currently around billion.

Other major Mega Banks are ratcheting up their compensation packages so their “talent” won’t be poached by Goldman or JPMorgan.

“As Goldman Sachs prepares to dole out some 7 billion to its executives and traders, it’s worth noting that Goldman received 3 billion a year ago from the rest of us via AIG and Geithner, no strings attached.”


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“Sens. Elizabeth Warren and John McCain Reintroduce Bill to Break Up Mega Banks, The Glass-Steagall Act Revived”