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Inside the Beltway With The New Glass-Steagall Act

Great Depression Protesters
Written by Cindy A Matthews

It is often said the movers and shakers of American politics exist inside a small and cozy world, busily wheeling and dealing with their peers.

The struggles of ordinary Americans couldn’t be further from their minds. Living solely “inside the beltway” of Washington D.C. is to ignore the rest of the country, its needs and desires, even when doing so places us all in grave danger.

On a recent trip to the nation’s capital, some ordinary Americans caught a glimpse into this inside-the-beltway mindset. Nineteen citizen activists representing four states (Ohio, West Virginia, Indiana, and Kentucky) descended upon twenty-six congressional offices to help build support for the Return to Prudent Banking Act introduced by Representative Marcy Kaptur (D-OH, 9th District). Better known as the New Glass-Steagall, the bill would return American banking practices to the tenor of the original 1933 act signed into law by Franklin D. Roosevelt. The Glass-Steagall Act, which was repealed by Congress in 1999, made the big banks divest from the speculative, risky side of commercial banking, protecting the ordinary people’s savings and home mortgages which had been lost in the devastating 1929 stock market crash, which resulted in the Great Depression.

Congresswoman Kaptur, at her press conference after the bill’s introduction, stated that, since the 2008 mortgage crisis, the “mega-banks” (JPMorgan Chase, Wells Fargo, Goldman-Sachs, etc.) have only grown in size. Their net worth has gone from being 17% of the gross domestic product to over 50%. Their new wealth has been siphoned from the ordinary Americans who lost their homes, their pensions, and their 401Ks in the mortgage crisis, a frightening parallel to the situation that faced President Roosevelt.

Many financial experts say that a student loan debt crisis could dwarf the negative effects of the 2008 crisis and could happen any day now. We must act quickly and decisively to prevent economic disaster by passing a New Glass-Steagall Act.

The heartening news is that both the Republican and Democratic Parties’ Platforms state they want to reinstate Glass-Steagall regulations. Along with Kaptur, Representatives Walter Jones (R-NC), Tim Ryan (D-OH), and Tulsi Gabbard (D-HI) are co-sponsoring the bill. Even Mr. Trump said during his campaign that he supported a return to the Glass-Steagall Act. White House Press Secretary Sean Spicer reiterated that Trump supported the Glass-Steagall–not once, but twice at the same press briefing on the same day as Rep. Kaptur’s press conference.

The citizen activists presented Congresswoman Kaptur with 637 signatures on letters addressed to President Trump reminding him of his campaign promise. At least three hundred more electronic signatures and comments were made online in the short span of a month and the activists asked for these letters and e-signatures to be presented to Mr. Trump as a reminder of his campaign promise.  There are thousands more who would gladly sign if given a chance. Fifteen state legislatures have passed memorial resolutions supporting the tenets of the Return to Prudent Banking Act, as well.

It seems most Americans want real protections for consumers by prohibiting the transaction of banking activities by securities firms. They want to rein in Wall Street by prohibiting banks from engaging in stock or bond sales and prohibit employees of securities firms from serving on the boards of depository institutions. And who wouldn’t want to provide oversight to guarantee no bank or financial institution is involved in risky investment or securities activities such as the kind that brought on the 2008 mortgage crisis? With so much going for it, what could possibly prevent the Return to Prudent Banking Act from becoming law?

Heavy lobbying by the banking and financial industries could spell the end of Kaptur’s bill, as they have the greatest number of lobbyists on Capitol Hill and give the most contributions to the campaign war chests of both Democrats and Republicans. Perhaps even more daunting is the inside-the-beltway mentality which can affect our elected representatives’ outlooks on the situation.  While some office holders openly declare they’ll do all they can to pass the bill, others simply can’t be bothered at this time.

This was perhaps the most enlightening aspect of the entire trip for the citizen activists–talking to the congressional staffers who are the eyes, ears, and brains of their bosses. A congressional office cannot be run without these young and energetic staffers who open and read all the letters and answer the phone calls and emails. They stated plainly that if they don’t get a sense from constituents that the New Glass-Steagall is important to them, then the congressional staffers simply tell their bosses not to waste time and energy supporting it, no matter how essential it could be for the good of our economy. 

In other words, “The squeaky wheel gets greased,” and the silent wheel is soon forgotten.

So, what can ordinary Americans do? If you can get several thousands of your friends, family members, colleagues, and neighbors to write post cards and letters to their representatives and senators, the staffers will have to take notice of your concerns and then they’ll be forced to bring up the subject with their employer. Most congressional offices receive between 50,000 and 60,000 letters per year. You can see where things can get lost in the volume, but a huge stack of letters on one subject–say, the Return to Prudent Banking Act–will catch their attention. The staffers will inform their bosses how important this issue is to potential voters. That could make all the difference in a bill gaining a new sponsor and increase its chance of becoming law.

Showing up at your representative’s D.C. or local office when he/she is home and attending their town halls and asking questions also makes an impression on them, so now is not the time to act shy. Now is the time to concentrate your activity on gaining your elected officials’ attention on this important issue. Ordinary Americans cannot withstand yet another 2008 mortgage crisis or Great Depression, but together we can prevent another one from happening.

 

Bio: Cindy A. Matthews is a freelance writer, novelist and editor of Our Revolution Continues blog: http://bernie2016.blogspot.com.

About the author

Cindy A Matthews

Cindy A. Matthews is a freelance writer, novelist and editor of The Bernie Blog. http://bernie2016.blogspot.com

2 Comments

  • Very true, Professor. The Glass-Steagall Act was one of the first acts signed into law by President Roosevelt after he took office. We’ve seen the same economic parallels with those of the early 1930s. We can’t wait any longer to take steps to protect ordinary Americans’ savings again.

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