The Ten Year Itch

Tyler Durden at Zero Hedge reminds us it was ten years ago today that Glass-Steagall was repealed by Gramm-Leach-Bliley, setting us up for the financial meltdown that followed.

At the time - (November 5th, 1999) - then Treasury Secretary Larry H. Summers said the highly touted bill would, "better enable American companies to compete in the new economy".

Co-sponsor of the bill Thomas Bliley was quoted as saying, "We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century". Glass-Stegall, 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". [does the current corporate communist, central Fed planning regime count for anything?]

And Senator Bob Kerrey (D-NE) assured those few who were worried about the bill's passing that, "the concerns that we will have a meltdown like 1929 are dramatically overblown".

Byron Dorgan (D-ND) was one of those who were concerned about the bill. He said, "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 which is true in the 1930's is true in 2010".

Is Mr. Dorgan correct? Are we looking at the GLB bill now and wishing that we didn't do it?

I guess the answer depends on who you ask..

After making $100 million or more in 116 out of 194 trading days, I'm sure the hard working folks at Goldman Sachs are wishing the GLB bill was celebrating its 40th anniversary.

Byron Dorgan was more correct than he could ever have known at the time. Now, ten years to the day, I can say that we have a lot of regrets financially in this country, and still have a long, long way to go. Boy, it's a good thing this bill was set up to protect taxpayers from being overcharged by banks and insurance companies, wasn't it?

I've railed against Gramm-Leach-Bliley for quite some time now and absolutely agree that it was a major contributing factor in the meltdown. The question is what will be done to correct it? So far the answer's looking like "Nothing."