Bernie Sanders is right when he says the economy is rigged by Wall Street insiders, and he was right to oppose Dodd-Frank. In the debates, he mentions restoring Glass-Steigall, the safeguard that had prevented investment banks from mortgage lending since the Great Depression.
But unfortunately, twenty years after the legislation that helped cause the global financial crisis, most Americans do not know what Glass-Steigall is, how it was eliminated or what led to the “selling of toxic assets” that blew up the world economy.
In a debate with Hillary Clinton, Sanders mentioned Glass-Steigall, but stopped short of explaining what it is, or that President Clinton signed the Bank Modernization Act in 1994 that repealed Glass-Steigall. The repeal was something that the big banks had sought for many years. To be fair Sanders could have mentioned that if President Clinton had not signed it, a veto-proof Republican majority would have passed it.
If Bernie Sanders had explained that investment banks could securitize the debt and bundled bad loans, into what became known as “toxic assets” that led to the derivative crisis. The financial meltdown and sub prime mortgage meltdown was simply harvest time for the banksters and the Wall Street/Washington cartel.
The big banks are bigger today then when the taxpayers bailed them out. I suspect it was the big banks that told the US Government to bail them out, but report that Treasury Secretary and former Goldman Sachs chief executive Hank Paulson supposedly forced the big banks to take the money.
Big banks run Washington and Treasury. Three recent White House Chief of Staffs have come from Wall Street including Jack Lew, former CEO of Citigroup. Citigroup is one of the companies that paid billion of dollars in fines for selling toxic assets to their clients, and betting against these loans. Why would a chief executive from one of the biggest banks on Wall Street want to be a White House of Chief of Staff?
Has any banking official ever gone to jail? No. In fact, after serving as President Obama’s Chief of Staff, Jack Lew was appointed to Treasury Secretary. Isn’t that like the wolf guarding the hen house?
I might have a little more hope that Bernie Sanders was serious when it comes to reforming Wall Street, if he would have mentioned any of this. But of course, exposing the Clinton’s role and other establishment politicians’ roles in the financial crisis, and Wall Street would be political suicide.
Dan Allie
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www.danallie.com
