USA Today‘s editorial today (10/12/11) is headlined “Five Good Reasons Why Wall Street Breeds Protesters.” It has the usual caveats–“The protesters’ rhetoric against capitalism and ‘corporate greed’ is over the top, and they seem devoid of remedies,” the paper notes–but on balance, the message is that there’s plenty to protest.
What’s galling is the sense that USA Today‘s been outraged all along. As when they explain:
Through lobbyists and campaign contributions, the banking industry has long had its way in Washington. This was evident in the Clinton-era legislation that repealed a post-Depression safeguard and allowed banking behemoths to combine banking and brokerages under one roof.
Boy, was it “evident,” right? Remember all of those USA Today editorials denouncing the Glass-Steagall repeal? Neither do I.
In fact, this (4/9/98)is what the paper had to say about the removal of that “post-Depression safeguard”:
It is nevertheless clear that banking laws designed for an economy 65 years ago don’t work as well now. The goal of the 1933 Glass-Steagall Act was to keep banks separate from insurance and securities firms as a way to protect banks.
But the law has weakened banks. They’ve lost ground at home and abroad to more flexible foreign financial firms.
Responding to this concern, the Federal Reserve Board over the past decade used its authority as regulator of bank holding companies to chip away slowly at the Glass-Steagall wall, giving banks more leeway to set up securities subsidiaries. The Fed has gone about as far as it can under the law. Congress has to tear down the rest of the wall.
As lawmakers remove obstacles to the brave new world of finance, they must take care not to leave the consumer behind.
About a year later, the paper (11/18/99) wrote that the repeal of Glass-Steagall was one of the few accomplishments of that congressional session:
On the eve of adjournment, after nearly 11 months in session, incumbents can point to only one major accomplishment: passage of compromise legislation overhauling Depression-era restrictions on banks, insurance companies and the securities industry.
If only we had listened then to what USA Today is saying now.