Candidate Obama repeatedly blasted Phil Gramm and the Gramm-Leach-Bliley Act, which Gramm had pushed through Congress with President Bill Clinton's support. This was legislation that repealed the Glass-Steagall Act http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act
and thereby radically deregulated the financial industry, allowing hundreds of billions of new profits to be made by Wall Street, at great cost to the American public.
But now John McCain and Sen. Maria Cantwell, D-Wash. have sponsored a bill to repeal Gramm's bank-friendly legislation, while captive Obama seeks to preserve it!
The Gramm legislation, which permitted the merger of investment and commercial banks into too-big-to-fail corporations (including Citigroup and AIG, two financial giants that had to be bailed out by taxpayers), was thought by Obama the candidate to be a key cause of the meltdown. But as president, Obama's views did a "180" turnabout and he reappointed the Clinton-era officials who had sided with Gramm in ending sensible banking regulations that had protected the American public from predatory capitalism for 70 years.
Rather than restore Glass-Steagall, the Obama-backed banking regulation bill (which was passed last month by the Democratic majority in the House) went along with the desire of Wall Street lobbyists to a) prevent the breakup of the big conglomerates and b) block any control of their massive trading in the derivatives that has proved to be so toxic.
The result, with some deceptive reformist window dressing, is a pro-Wall Street business-as-usual cop-out, and the Senate version is likely to be more of the same.
Fortunately, there is a better way, and thanks to the McCain-Cantwell bill and a companion bill authored by Rep. Maurice Hinchey, D-N.Y. in the House, there is still a chance at serious financial regulation through the restoration of the key provisions of Glass-Steagall.
How odd that it now remains for John McCain to stand up to the oversized and overly powerful banks:
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