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UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See prorev.com for full contents of our site

January 18, 2010

OBAMA TO RIGHT OF MCCAIN, VOLKER AND WALL STREET JOURNAL ON KEY FINANCIAL ISSUE

Miles Mogulescu, Huffington Post - On Friday, The Wall Street Journal editorial page joined such noted left-wing radicals as Alan Greenspan, John McCain, and Paul Volker in support of restoring the barrier between commercial banks and investment banks which did so much to prevent economic meltdowns between the 1933 passage of the Glass-Steagall Act and its repeal in 1999 by a bipartisan coalition of Congressional Republicans and Clinton Democrats led by Robert Rubin and Larry Summers.

In an editorial (also opposing the Obama administration's proposed bank tax), The Wall Street Journal wrote:

"A better idea is to do the hard policy work of creating a plan that. . . separates traditional banking from hedge-fund trading, as Bank of England Governor Mervyn King and former Federal Reserve Chair Paul Volker have suggested."

In December, the unlikely pair of John McCain and Washington Democratic Senator Maria Cantwell announced the proposed McCain-Cantwell bill which would restore Glass-Steagall's wall between commercial banks and investment banks. . .

Volker has been one of the strongest voices for separating commercial and investment banking:

"As a general matter, I would exclude from commercial banking institutions, which are potential beneficiaries of official (i.e. taxpayer) financial support, certain risky activities entirely suitable for our capital markets. Ownership or sponsorship of hedge funds and private equity funds should be among the prohibited activities. So should in my view a heavy volume of proprietary trading with its inherent risks."

Volker told The New York Times,

"People say I'm old fashioned and banks can no longer be separated from non-bank activity. That argument brought us to where we are today."

So what is the Obama administration's reaction to the proposals of its campaign's erstwhile economic guru? An anonymous spokesperson from Obama's Treasury Department stated,

"I think going back to Glass-Steagall is like going back to the Walkman."

Newsweek reports that opposition from the Obama administration makes "Senate prospects for the success of the McCain-Cantwell bill. . . seem bleak at best." According to Newsweek,

"Obama administration officials have dismissed the idea that the financial sector should or can be changed in more fundamental ways than they are now proposing. You can't turn back the clock, they say."

Such far-left radicals as Greenspan, Volker, McCain, and The Wall Street Journal now think we can and must turn back the clock. Of course Obama's chief economic advisor is Larry Summers who was one of the chief architects in repealing Glass-Steagall. . .


1 Comments:

Blogger Samson said...

Wanna know why?

Go read this list of Obama's top contributors for his 2008 campaign. It reads like the Wall Street phone book.

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

Of course, this isn't anything new. This has been the paid-for Democratic party position since the late 90's when Bill Clinton pushed for and happily signed the bill that did this.

January 19, 2010 2:29 PM  

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