--and that's absolutely lovely but this Glass-Steagall debate is serious and is not affected by how much God loves you more than He loves me.
This is a point that you and 9YearLurker have in common and my thinking is expanding to see the nature of the mindset as being the real problem the nation faces. It's the fact that too many people love to strut their stuff so much that they've got no time to stop what hurts America.
Now if we take Rockingham’s point and add a little to it —we’ll come to an understanding of of why the separation of commercial and investment banks was repealed in 1999—and why that provision needs to be reinstated. First
Rockingham’s point:
Perhaps the best argument in favor of GS is that commercial banking and investment banking are different lines of business that need not just different regulatory treatment but also require divergent business skills, philosophies, and personalities. Where Main Street needs banks run by sober minded professionals with regular habits who are content with unspectacular profits from fees and securitized loans, Wall Street investment banks need buccaneers who are hungry to take risks for the sake of outsize gains.
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By repealing the provision of Glass Stegal 1999 that separated commercial and investment banks the —RISK for bad loans was shifted from the investment banks to—ultimately— the tax payers. When pirates lost—who would cover their losses—the investment banks or the taxpayers? By repealing
Glass Stegal—the democrats insured that pirates could make as many risky loans as they liked —while catching great commissions—with the full knowledge that they would be bailed out by the tax payers.
That’s what happened.
By reinstating the provision of Glass Stegal that separates Investment and Commercial Banks— what happens is that Investment Banks sink or swim on their own. Because they’re playing with their own money—they’ll be naturally motivated to be more prudent with their own investments. They’ll naturally limit their investments to ones that have a higher probability of success.