Arkady's Thoughts

This topic may sound mundane, but understanding the history behind this controversial act is important to absorb as talks about it's reinstatement heat up.  Glass-Steagall was repealed in 1999 by the Gramm-Lichey-Bliley act and has been blamed by many as the primary cause of the 2008 Housing Crisis.  Recently John McCain and ex-Fed chairman Paul Volcker proposed the return of Glass-Steagall along with many Democrats and prominent bloggers including Karl Denninger of Market Ticker fame.  However without examining the history of Glass-Steagall and the cause of it's existence can lead to needless legislation and shift the conversation away from the true root cause of our financial system. To begin with, we need to zoom back in time to 1933 during the midst of the Great Depression.  We know tensions were running high, people were angry and rightfully demanded retribution.   Starting with Herbert Hoover and continuing with FDR, banks and Wall St. were ...