Wednesday, August 1, 2012

Sandy Come Lately

Sandy Weill, the former chairman of Citgroup, the  same Sandy Weill who argued for and benefited from the repeal of the Glass-Steagall Act that allowed for the merger of Citbank and Travelers Insurance that made it the largest financial services firm in the world, now says that the big banks should be broken up.

More specifically, he said: "What we should probably do is go and split up investment banking from banking," Weill said. "Have banks do something that's not going to risk the taxpayer dollars, that's not too big to fail."

[see the interview here: ]

The Glass-Steagall Act was designed to enforce the separation of commercial and investment banking so that financial institutions would not be using all their deposits at the Wall Street casino. It's repeal is what contributed to the great financial capitalist crisis. Now it is back to the future.

 Well, Sandy, better late than never.

In the interview, in response to Weill’s common sense suggestion given everything that has happened and continues to happen in the financial sector, the commentator says “That’s a pretty radical idea.”

Radical? Really?  It actually represents the status quo ante before the free market fundamentalists took over economic policy in this country and ran it into the ground. The fact that this is a "radical idea" is an indication of how far right the economic discourse has moved.

Too bad Obama is unable to follow Weill's good advice. Those massive campaign contributions from Wall Street may have something to do with it. And then there are his economic advisers who come from the banks that would be impacted by a return to sanity in the financial sector. 

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