WASHINGTON – The push to restore the Glass-Steagall banking act has returned to the U.S. Senate.
Sen. Tom Harkin on Thursday introduced S. 985, which would rebuild the wall that had once separated commercial banking from brokerage and investment speculation. The Iowa Democrat’s bill came on the 80th anniversary of the original 1933 Glass Steagall Act.
The text of S.985 was not posted on the Senate website as of Friday afternoon, but it is believed to resemble HR 129, introduced by Reps. Marcy Kaptur, D-Ohio, and Walter Jones, R-N.C. Their measure has 62 bipartisan sponsors in the House.
Meantime, 20 state legislatures are considering resolutions urging Congress to reinstate Glass-Steagall. Lawmakers in four states — South Dakota, Maine, Indiana and Alabama – have passed such measures.
Harkin was one of eight senators to vote against financial deregulation that formally abolished Glass-Steagall in 1999.
The repeal, signed by President Bill Clinton in the waning days of his administration, cleared the way for Wall Street bankers to expand trading in bundled subprime mortgages, derivatives, collateralized debt obligations, credit default swaps and the like.
Inventing evermore exotic investment vehicles, the money movers pumped up a global financial bubble that burst in 2008.
Sen. Maria Cantwell, D-Wash., attempted to restore the banking law in 2010, but her efforts were blocked.
“The problem in the financial sector, as with so many areas of our economy, is that the ground rules and oversight have been lax,” Harkin said at the time.
“Too many in the financial industry put profits ahead of people. As a direct consequence, tens of millions of ordinary Americans have lost their jobs, their homes and their livelihoods.”
Lyndon LaRouche, an economist and former presidential candidate, applauded Harkin on Thursday.
“This is a new game. Despite all of the efforts to prevent this action, Sen. Harkin has taken the initiative,” LaRouche said.
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