Glass-Steagall "Battle of the Books"

July 23, 2013 • 10:21AM

Two columns on the Bloomberg News site, taking opposing views on the Glass-Steagall fight, demonstrate how contentious the issue is, among the intelligentsia:

On July 21, a "news" article by Wall Street defender and two-tim(ing?) author William D. Cohan "corrects" Eliz Warren: "While it's true enough that these banks courted too much risk, Warren's conclusion that this caused the financial crisis is simply inaccurate... If Warren were serious about preventing the next crisis, she would do well to focus on changing how people on Wall Street get rewarded. Glass-Steagall kept financial calamity at bay for some 60 years by making risk-takers pay when things went wrong..."

Monday morning, an "Opinion" by Red Jahncke, president of Greenwich, Connecticut's Townsend Group International LLC (who has endorsed Glass-Steagall before), emphasizes Glass-Steagall superiority over useless Dodd-Frank legislation: "Our forebears in 1933 had the courage to break up their big banks, including the House of Morgan, the banking empire of the most powerful banker of the era, John Pierpont Morgan Jr. We must summon the same courage today, most prominently in the case of the present-day goliath that bears his name."

Lastly, political columnist Anthony J. DiStefano writes in the Aiken (S.C.) Standard: "In order to avoid another bank crisis, Congress should pass a new Glass-Steagall Act, which separates traditional commercial banking from high-risk investment banking. Most importantly, high moral values and accountability must be restored throughout our society; all of us should examine our conscience and rededicate ourselves to being honest in our dealings with others — especially those of us who are the leaders in politics and finance."