Green Party backs restoration of Glass-Steagall protections, but calls proposed Warren-McCain legislation only a first step
WASHINGTON, DC — Green Party leaders are calling for passage of legislation to reinstate the protections of the Glass-Steagall Act of 1933.
But Greens are calling such legislation, which has been proposed by Senators Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.), a modest first step towards reining in the power of major financial corporations whose fraud and recklessness led to the 2008 economic meltdown.
“Repeal of Glass-Steagall in 1999, signed by President Clinton, was part of a trend in financial-sector deregulation that ended 50 years of relative economic stability. In the early 1980s, deregulation of the Savings & Loan industry under President Reagan triggered the first major crisis. The leadership of both established parties have continued to support deregulation, with bailouts instead of jail terms for the firms that engaged in predatory lending and fraudulent trading,” said Starlene Rankin, co-chair of the Green Party of the United States.
Greens noted that the repeal of Glass-Steagall removed the firewall between commercial and investment banking, allowing banks to turn risky loans into securities. The repeal motivated banks to peddle loans, especially adjustable-rate mortgages and high-interest subprime loans, to borrowers unlikely to pay them back — which is lending fraud. The loans were bundled into securities that were given high ratings despite their toxicity.
“The repeal allowed banks to expand into investing, resulting in increased competition and reckless and often criminal investing practices to produce enormous short-term profits — with minimal accountability regardless of whether Democrats or Republicans are in power. The big banks have learned nothing from their mistakes. They’re already pushing for taxpayer-funded bailout insurance for unregulated high-risk derivatives trading,” said Julia Willebrand, Green candidate for New York City Comptroller and an active member of the Occupy Wall Street Alternative Banking Working group.
“The Green Party offers a democratic alternative to the centralized ‘command economy’ under corporate bureaucracies that exercise enormous influence in the White House, Congress, and state governments. Such influence includes huge campaign checks, intensive lobbying, and an Obama White House staffed with Wall Street operatives,” added Dr. Willebrand.
Green Party leaders listed other necessary steps for a fair and stable economy:
• Holding banks and bank executives accountable for mortgage fraud and other corporate crimes. Attorney General Eric Holder and the SEC are sitting on a mountain of evidence that they’ve declined to use for prosecution (“Begging Obama to Turn on His Banker Friends” by Glen Ford, Black Agenda Report, March 13, 2013,http://www.blackagendareport.com/content/begging-obama-turn-his-banker-friends).
• Declaring a halt on home foreclosures and assisting borrowers who were lured into taking out impossible-to-pay adjustable-rate mortgages (http://www.gp.org/press/pr-national.php?ID=458). Green Mayor Gayle McLaughlin has used eminent domain to save homeowners in Richmond, California, from eviction (“A City Invokes Seizure Laws to Save Homes” by Shaila Dewan, The New York Times, July 29, 2013,http://www.nytimes.com/2013/07/30/business/in-a-shift-eminent-domain-saves-homes.html).
• Repeal of the 2000 Commodity Futures Modernization Act; regulating and requiring transparency in the trading of complex and nonretail securities (derivatives, hedge funds, credit default swaps). Greens have called the industry for such trading a multi-trillion-dollar gambling casino that can cause widespread ruin.
• Passage of a Wall Street transaction tax, which would stabilize the stock market, discourage reckless ‘casino’ trading, and generate revenue (http://www.gp.org/press/pr-national.php?ID=613).
• Break-up of too-big-to-fail banks into smaller, regionally based banks whose failure wouldn’t jeopardize the national or global economy; promoting creation of state and municipal banks to keep money circulating locally, spur local investment, and stop the drain of money to Wall Street. Greens cited the state-owned Bank of North Dakota as a successful example (“Why Is Socialism Doing So Darn Well in Deep-Red North Dakota?” by Les Leopold, AlterNet, March 29, 2013, http://www.alternet.org/corporate-accountability-and-workplace/why-socialism-doing-so-darn-well-deep-red-north-dakota).
Greens said that state and municipal banks, unlike predatory Wall Street behemoths, have a stake in the health of local economies. Such economies can be the engine that drives the Green New Deal, promoted by 2012 Green presidential nominee Jill Stein and other Green candidates (http://www.jillstein.org/green_new_deal), which calls for massive investment and creation of millions of jobs in new energy technologies and conservation that can help alleviate the global climate crisis.
“The fundamental flaw in our economy is that control of our money supply is in private hands, for private benefit. Publicly-owned banks have benefited not only the small state of North Dakota, but also large economies like the BRIC countries of Brazil, Russia, India and China. Public banks are established to help cities, states, and nations, not Wall Street. Thank goodness there is forward movement toward such banks in more than 20 states. We need elected officials who take no corporate money so they will champion these banks,” said Laura Wells, Green candidate for State Controller in California in the 2014 election.
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