Nine year old Gramm-Leach-Bliley cracked the foundation of Wall Street. It turned ten today, which means only three more years before the bill becomes an adrenaline fueled teenager. Be sure to thank all those voting to break down the walls between financial institutions.
For a trip down memory lane:
Treasury Secretary Lawrence H. Summers praises the legislation, declaring that the law “will better enable American companies to compete in the new economy.” Among others praising passage of the measure:
Senator Phil Gramm (R-TX), sponsor of the bill, says: “We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.”
Rep Jim Leach (R-IA) remarks: “This is a historic day. The landscape for delivery of financial services will now surely shift.”
Senator Charles E. Schumer (D-NY) says, “There are many reasons for this bill, but first and foremost is to ensure that US financial firms remain competitive.”
Senator Bob Kerrey (D-NE) says, “The concerns that we will have a meltdown like 1929 are dramatically overblown.”
Senator Byron L. Dorgan (D-ND), who says: “I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930’s is true in 2010.”
Senator Paul Wellstone (D-MN), who says: “Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.”
The man who signed the bill met with Senate Democrats on health reform just yesterday. What does that portend for health care in a decade's time? It likely will mean mega-mergers, leverage, risk taking on the taxpayer's back, privatization, excess executive compensation, an obsession on profits, exclusive reliance on extrinsic motivators, and junk innovation.
Guess what health insurers own? They hold a billions in residential and commercial real estate mortgage securities. They play the derivatives game, like their life insurance brethren. Yes Mr. Gramm, the new century is here. It looks another decade of doubling down on our bets. Who will Gramm-Leach-Bliley marry when he turns twenty? Maybe the stunning woman in the red or blue dress? What if she changes?
