Trump Wants To Bring Back Glass Steagall? Bad Idea

Investors Business Daily ^ | Oct. 27, 2016 6:36 PM ET | Editorial

[expat_panama]

.. ...Trump revived an idea that he had some time ago: Creating a new Glass-Steagall Act for the 21st century as one way to help African-Americans gain access to credit. It's hard to imagine a worse idea for reviving the banking industry and the economy...

...Trump said a number of things that are absolutely true.

"Dodd-Frank has been a disaster, making it harder for small businesses to get the credit they need," Trump said.

Dead on. He also said...

...time for a 21st century Glass-Steagall...

...Glass-Steagall was first signed into law in 1933, in the depths of the Great Depression. The idea was that banks were in a weakened state, and they shouldn't be gambling with depositors' funds in the stock market. So, by law, the two functions were separated. A bank could do one, but not the other.

In 1999, President Clinton, with help from the Republican-controlled Congress, repealed one part of the Glass-Steagall Act...

...the 2010 passage of the spectacularly awful Dodd-Frank financial reforms, which many economists now believe are largely to blame for our substandard economic and jobs growth over the past eight years.

The myth continued...

...Glass-Steagall narrative served the Democrats' purposes to suggest that something the Republicans had a hand in — financial deregulation and Glass-Steagall's partial reform — was the real cause of the financial crisis. Sorry, but to use an old economics term, that's bull...

...It would be nice to think that this is ... ...an attempt to steal some of Hillary's thunder... ... a very bad idea indeed to bring back Glass-Steagall as it was.

[expat_panama]

What we got here is that people say Trump likes Glass Steagall but so far I haven't been able to find Trump saying it. If anyone has a link to a video/audio of Trump saying this pse share.

In the meantime he's going to win and nothing can depress our enthusiasm. 

fwiw, here are all 32 Sections of the original 1933 Glass-Steagall Act, and this is the 1999 Actthat included this section:

--that removed Sections 20 and 32 or the 1933 act--

and still left in all the other 30 sections with that stuff about separation of "commercial and investment banks".   The left-wingnut press keeps saying that the 1999 'deregulation' caused the 2008 crash, but that's so we don't blame the real culprit for all those forced minority loans.
 

[rstrahan]

Banks need to be broken up, Glass-Stegall brought back, Dodd-Frank done away. What we have now only benefits the top 10% of the population.

[freedomcrusader]

Bunkus. That the biggest economic downturn since the Depression occurred AFTER repeal of Glass-Steagall is absolutely NO accident.

It needs to come back.

Don’t listen to the establishment, who desperately want to keep their gravy train rolling.

[jsanders2001]

I would advise him to speak to people in the collections industry at length before even thinking about it. Extending credit is not the way to dig anyone out of poverty. That’s a bandage that will come back to bite the economy in a huge way. You’re going have to get more of them employed. I think they are ready and willing to work but they got to have jobs to go to. Need to make America a hotbed of innovative technological revolution and do our own manufacturing somehow. How to keep the costs down and pay our workers enough to live on. That’s the hard part.

[jonrick46]

The repeal of Glass-Steagall set the stage for the collapse of the mortgage market in 2007.

[Sacajaweau]

ttp://www.salon.com/2015/07/18/robert_reich_hillary_clinton_is_making_a_big_mistake_by_not_reinstating_the_glass_steagall_act_partner/

[rb22982]

Minority loans were a good portion of the problem, but it would have collapse anyway. Whites, Asians, etc in CA, Vegas, and Florida were doing negative amort alt-A liar loans and 0 down loans in record numbers as well - in far greater total $ amounts than minority loans. That doesn’t even count the piggy back HELOC loans whites were taking out either. Glass-Steagall should either be reinstated or we should move to a 20-25% fractional reserve system over time rather than the 10% we normally allow and as low as 3-4% during the 2006-2008 time (bear sterns blew up with 50:1 leverage).

[bert]

Digging their way out of poverty is not the objective of the borrowers

Buying a new car is the objective and free money is available everywhere to buy a car

[ground_fog]

100% for reinstating this. 100%

[expat_panama]

It's Friday!  Stocks were crashing yesterday almost to the support levels we've been enjoying for months now.  While it was yet another bearish 'distribution day' this morning's futures are mixed, these mostly positive and these others at -0.78%.  Metals seem flat/sideways both w/ current prices and in futures contracts.

 Everyone must be looking for an election year rosey GDP:

8:30 AM Chain Deflator-Adv.
8:30 AM GDP-Adv.
8:30 AM Chain Deflator-Adv.
8:30 AM Employment Cost Index
10:00 AM Michigan Sentiment - Final

Also:

Don't Forget Sen. Warren, That Corporations are People - Ben Stein, TAS
Stocks Already Predicting Clinton/Trump Winner - Jen Wieczner, Fortune
Who Will Pay for HRC's Tax Code Social Engineering? - Alex Brill, RCM
Don't Assume that Next President Will Face a Recession - Neil Irwin, NYT
Here's Who Has the Billionaire Class Terrified - John Nichols, The Nation
Post Obama, Quest to Keep Behavioral Economics - David Johnson, TNR
It May Be Time to Turn Away From Index Funds - Philip van Doorn, MW
Global Policymakers Starting to Shiver - Jeffrey Snider, RealClearMarkets
China's in Better Shape Than Its Critics Believe - John Redwood, Telegraph

[Dr. Sivana]

Yup, health insurance restricted to individual states and banks with no such restrictions has got it backwards. Limiting banks to a single state reduces “Too big too fail”. For the REALLY big projects, multiple banks can be used.

I’m not all in for Trump economics, but he sure got this one right.

[BigEdLB]

IBD upset with Trump, so they Fraud their poll to a +7 D.

[Laser_Ray]

I consider myself a well-informed individual and I STILL didn’t realize just how much banks were ripping people off until my boss (with an alphabet soup of accolades and degrees) showed me. It’s no frigging wonder Occupy went from nothing to international nightmare seemingly overnight. Bring back GS, NOW!

[4rcane]

no, bring back glas steagall. If you’re going to provide deposit insurance, you can’t allow banks gamble with that money

[polymuser]

He is certainly upsetting the money changers.
Lord, please protect Donald Trump.

[jospehm20]

Yep.

[rcofdayton]

I agree. These mega banks are allies of the ruling class.

[mumblypeg]

What needs to come back is the Bible.
Sweat of the brow. Tithing. Charity begins at home. Thou shalt not steal. Thou shalt not covet. Saving in times of plenty, preparing for times of famine.

The last is particularly relevant to banks and the economy at large, and their relationship to individuals.
It was not so long ago that banks only loaned out what they had on deposit, and they only loaned to those who could pay it back. Banks charged a reasonable interest rate to borrowers which covered overhead, plus a profit.
The banks, in turn, paid interest to savings depositors, incentivizing individual savings that could then be loaned out, and repaid to the depositors.
Wise, frugal people prospered.
Then the government decreed that common sense and incentives were racist, and that “income inequality” must be eliminated, by disincentivizing the productive folks and rewarding loafers.
And here we are.

[cashless]

Restore Glass-Stegall and strike RFA (the original source for mandated Non Performing Loans) and make it legal for bankers to shoot anyone that protests in front of their house about “minority” rights.