Reflections on Glass-Steagall and Maniacal Deregulation

But in Congress a recognition is now settling in that regulatory reforms on the table are failing to deal with the problems of size and industry structure -- and that there may be a severe political price to be paid for such failure. Suddenly, it seems that common sense may again be politically viable.

Somehow, common sense and Congress don't seem to mix.

What most American still do not get, especially liberal class deluded ideologues, is that Clinton, and his NAFTA, Deregulated policies, mirrored, appeased Reagan's free market fascism, that hollowed out social wealth and productive industries into the slave market labor countries like China to enrich a handful of billionaires, the result of a hollowed out middle/working class......ALL LINKED TO THE VERY SAME CLASS IDEOLOGIES, FREE MARKET DOGMAS, CORPORATE, CLASS MYTHS OF BOTH CORPORATE PARTIES. It is an ideological prison, that keeps Liberals from real change, chained to imperial policies, corporate policies, Wall STreet and Empire.....of their own deluded, stubborn resistance to look at their own ideological failures.

As a former stockbroker I am most familiar with that legislation. The repeal of that legislation is touted as the big reason why we got into this "mess". Sounds good, not true however. The act had been gutted way before its repeal. The firm I worked for was taken over by a huge insurance company back in the early 80s way before the bill was repealed. Numerous firms had already skirted the regulation by that time. In addition banks, which had been restricted as to their geographic area, like Citi Bank had been allowed to expand across state lines way before the repeal of the act. In fact Chicago banks were restricted to one branch due to Depression era legislation. It was the state that allowed those banks to expand. It is simplistic to blame this mess on a piece of legislation that had no teeth. Sounds good, not true.

A year ago, as the financial crisis was unfolding, it seemed very plausible that these reforms would be seriously debated in Congress. Three months ago, it appeared that Wall Street had successfully maneuvered to keep them off the table. But in Congress a recognition is now settling in that regulatory reforms on the table are failing to deal with the problems of size and industry structure -- and that there may be a severe political price to be paid for such failure. Suddenly, it seems that common sense may again be politically viable.

Marx had great insight into Capitalism and how it worked in his time. Little-by-little we are approaching such a system again. It was characterized by horrible working conditions, exploitation, poor wages and no future. Sound familiar?

In the near future you'll see a redefinition of what constitutes who is and isn't considered unemployed. Here is a little history showing how previous administrations played around with the numbers to fool Americans:

• During the Kennedy administration, unemployment was redefined with the concept of "discouraged workers" so as to reduce the popularly followed unemployment rate.
• If Lyndon Johnson didn't like the growth that was going to be reported in the GNP, he sent it back to the Commerce Department, and he kept doing so until Commerce got it right. The Johnson administration also was responsible for gimmicking the accounting that hides most of the federal deficit.
• Richard Nixon had a highly publicized war with the Bureau of Labor Statistics on the unemployment data. Nixon wanted to report the unemployment rate as the lower of the seasonally adjusted or unadjusted number, at any given time, but not specify same to the public. While that approach was unconscionable at the time and never used, basically the same methodology was introduced in 2004 as "state-of-the-art" by the current Bush administration.
• The Carter administration was caught deliberately understating inflation.
• Systemic changes were introduced during the Reagan administration to boost reported GNP/GDP growth on a regular basis. The wildest manipulations, however, happened at the time of the 1987 liquidity panic. In addition to intervention in the futures markets by the New York Fed to help prop the stock market after the October 19th crash, direct and heavy manipulation of the trade deficit data, under the direction of the Federal Reserve and U.S. Treasury, was used in conjunction with massive currency intervention to help bottom the dollar and to contain the currency panic at year-end 1987.
• The first Bush Administration began efforts at the systematic reduction of the reported rate of CPI inflation, and worked an outside-the-system GDP manipulation aimed at helping with the failed 1992 reelection bid.
• As former Labor Secretary Bob Reich explained in his memoirs, the Clinton administration had found in its public polling that if the government inflated economic reporting, enough people would believe it to swing a close election. Accordingly, whatever integrity had survived in the economic reporting system disappeared during the Clinton years. Unemployment was redefined to eliminate five million discouraged workers and to lower the unemployment rate; methodologies were changed to reduce poverty reporting, to reduce reported CPI inflation, to inflate reported GDP growth, among others.
• The current Bush administration has expanded upon the Clinton era initiatives, particularly in setting the stage for the adoption of a new and lower-inflation CPI and in further redefining the GDP and the concept of seasonal adjustment.

http://www.bestmindsinc.com/documents/Gillespie.Williams.GovtStats.EmloymentandUnemployment.2004.pdf

Both parties are worthless and deserving of all our contempt as they cater to the best interests of the few. There will be no meaningful legislation on the matter of regulation. Anything that is passed will be watered-down to the point of absurdity. The best we can hope for is the total and final collapse of Capitalism. We’re now on the cusp of that event. The system previously exhausted all its pathways and all eventually led to failure. The only “option” left is the financial gimmickry which tanked the economy. The system has run out of ideas, it has ceased to be creative. All economic "philosophies" have their time and then die. Capitalism is approaching that time. By the end of this century a new and hopefully fairer system will rise out of the ashes, one that works on behalf of ALL society, not just its financial elite.