Glass-Steagall Rings Through Congressional Malaise
June 20, 2012 • 8:07AM

At Tuesday morning's House Financial Services Committee hearing on the JP Morgan $2 billion loss, Rep. Mike Capuano (D-MA) opened his five-minutes question time with a boost for Glass-Steagall, telling all members that "everyone should sign on to HR 1489." Before that, CFTC chairman Gary Gensler, in his opening statement, had referenced "the 1933 reforms" (i.e., which still relied on Glass-Steagall) as fundamental to reducing risk in financial markets. HR 1489 is currently before the same House committee.

"Mr. Chairman," Capuano began, "first, I'd like to just point out that anybody who is interested in breaking up some of these large institutions should sign on to H.R. 1489, which would reinstitute the Glass-Steagall Act, which I voted against repealing in the first place, which was repealed by a bill called the Gramm-Leach-Bliley Act, which I recall with [were?] three Republicans who sponsored that act to repeal the Glass-Steagall that allowed the beasts of Wall Street to come into existence."

Capuano's intervention served to "cut through" the impotence of the Members' questions otherwise. In the Committee's second session, where JPMorgan Chase bankster Jamie Dimon was the witness, Rep. Nydia Velasquez demanded to know if Dimon was for or against Glass-Steagall bank separation; when he said he opposed it, Velasquez said, "I thought so." (Dimon then made a long, Geithner-like argument against Glass-Steagall.) A series of Democrat Committee Members demanded to know from Dimon why his $350 billion risk-trading operation was in London, and why "it's always in London," where the wildest unregulated speculation is going on.

Otherwise the discussion — reduced at times to the level of partisan bickering — would have focussed on nothing but the inadequacies of Dodd-Frank: whether it eliminated or codified Too Big to Fail banks; how many supervisory bodies it takes to insure that a bankster remains honest; and whether to swear-in bank witnesses.