Glass-Steagall Resolution Introduced In California

August 7, 2013 • 9:41AM

California became the twenty-fourth state in the nation in which a resolution has been introduced calling on Congress to pass Glass-Steagall legislation, which is before both Houses of Congress. The measure, ACR 73, was introduced August 5 by Assemblyman Roger Hernandez, a Democrat from Los Angeles, and, so far, has one cosponsor. As a "concurrent" resolution, it can be brought before the Senate, as well.

In its preface, the resolution states that the "measure would urge the President and the Congress of the United States to enact federal legislation to protect the public interest by reviving the separation between commercial banking and speculative activity embodied in the Glass-Steagall Act."

In the following "Whereas" clauses, the resolution describes what Glass-Steagall did; that it was repealed in 1999, which allowed commercial banks to engage in "speculative activity [which] worked against the public interest by placing the commercial banks themselves in financial jeopardy and contributing to the Great Recession"; states that Dodd-Frank "does not provide the same level of protection...as the provisions of the Glass- Steagall Act"; and that the "public interest will continue to be at risk until commercial banks are prohibited from engaging in speculative activity again."

After identifying the House (HR 129) and Senate (S 985) bills, the memorial has a whereas clause which identifies the support for restoring Glass-Steagall from "diverse" groups and individuals, citing, among others, the AFL-CIO, AFT and IAM; Thomas Hoenig, David Stockman; economists Luigi Zingales and Lyndon LaRouche; Robert Reich; and "various state legislatures...."

That this resolution was introduced demonstrates that the line, that "California is back," which is being spread due to the "achievement" of a "balanced budget" pushed through by a Democratic Party super-majority in the legislature, is recognized as a fiction, and that the state is suffering from an accelerating collapse in agriculture and manufacturing. This collapse was "overcome" in the budget by the combined effects of a short-term revenue increase related to capital gains from the stock market bubble, which is not sustainable; accounting gimmicks; and the cumulative effects of more than $100 billion in cuts, especially in life-saving social programs, over the last decade.

The part-time, temporary and low-wage jobs created by this "recovery", combined with "green" spending, represent no alternative to national action, which has been acknowledged by many in the legislature, who agree that federal action, beginning with passage of Glass-Steagall, is a necessary pre-condition for a real recovery of the state, and national, economy.