Under Glass-Steagall, U.S. enjoyed nearly 50 years of prosperity

October 30, 2013 • 4:48PM

“Under Glass-Steagall, the nation enjoyed nearly 50 years of prosperity. Commercial banks loaned money. Investment banks did deals. Securities firms sold stocks and bonds. Insurance companies sold insurance. It worked,” points out St. Louis Post-Dispatch.

The reprint of the Post-Dispatch article in a website, Creators.com indicates the growing urge among the millions to reinstate the Glass-Steagall Act of 1933 and prevent a massive financial and economic collapse which many fear is waiting in the wings.

Recalling the role of Robert Rubin, President Clinton’s Treasury Secretary and co-chairman of Goldman Sachs in repealing Glass-Steagall, St. Louis Post-Dispatch went on to say that the boom years of the 2000s seemed to validate his wisdom. The world was awash in cheap capital. But, “then came 2008. The big banks had used federally insured deposits to invest in exotic financial instruments backed by outrageous mortgages. The banks were leveraged far beyond what their capital holdings would support. The world financial system teetered on the brink.”

Pointing out the failure of President Obama to change the economic situation that existed in 2008, Post-Dispatch says : “Here's a campaign slogan: Bring back Glass-Steagall. It was good enough for FDR. It was good enough for 50 years of prosperity. The money that is churning through international finance these days is doing just that — churning, creating profits, not jobs. It makes food and fuel and most everything else more expensive. It is an outsized Ponzi-scheme that enriches the few at the expense of the many.”