Last weekend I hosted a free screening of the movie Inside Job at the Kent Library. This documentary shows us how the financial industry pillaged the American economy during the Banking Crisis of 2008. One of the key causes of the Great Recession was the transfer of assets from the balance sheet of banks to the speculative markets. This was made possible by deregulation, specifically the repeal in 1999 of key provisions of the Banking Act of 1933, also known as the Glass-Steagall Act, allowing banks to gamble with their depositor’s money. When the housing bubble burst and the banks lost their bets, they came to you and me with their hands out, claiming to be too big to fail, and demanding that taxpayers foot the bill for their recklessness. They got what they asked for, and they are even now smoking cigars and patting each other on the back for having once again tricked the rubes out of their money.
This system of privatized profit and socialized risk must end.
There is an inherent conflict of interest when bankers who have control of funds deposited by individuals and small businesses are the same people who are creating the financial products into which that money will be invested. FDR knew this back in 1933 when he signed the Glass-Steagall Act into law. It is important to remember not only why he did this, but also that in doing so he did not destroy the country’s banking system or stifle investment in American business. On the contrary, confidence in the banks was restored and the nation began the climb out of the Great Depression.
One of the attendees at the move screening, David Spring, told us about a bill in Congress (H.R. 1489: Return to Prudent Banking Act of 2011) that would reinstate the separation between commercial banking and the securities business in a manner similar to the Glass-Steagall Act. Last Tuesday, David brought a resolution before the King County Democrats calling for passage of H.R. 1489, and I was happy to vote along with him and a super majority of the voting members of the KCD Central Committee to pass the resolution.
Now it’s up to everyone reading this to call or write their Congressperson to urge them to co-sponsor and pass this vital legislation. (If you are in the 7th CD, thank Jim McDermott for being the first legislator from WA to co-sponsor this bill.) Please email this widely and also pass this along to your Facebook friends and post to your Twitter feed.
Brian L. Gunn