Opponents of Glass-Steagall Thrown into Psychological Disarray
July 28, 2012 • 7:08PM

"You can't put the scrambled eggs back in the toothpaste tube," is among the powerful arguments being wielded by bankers and others horrified at Sandy Weill's call for a return to Glass-Steagall. With their former champion jumping ship, those left behind on the sinking Titanic are acting shell-shocked and incoherent.

"Of course," Lyndon LaRouche commented. "They're bankrupt!"

For example, a July 27 Reuters wire, headlined "Banks bristle at breakup call from Sandy Weill," cites an unnamed former top banking executive saying that "unscrambling the egg" is one of the main difficulties in any plan to separate the banks. The wire then goes through the familiar exercise of setting up a straw man—presenting the issue as the size of banks, as opposed to the types of banking activity they engage in—to then argue back and forth about "the benefits of being big." JP Morgan's former head William Harrison is cited attacking Weill: "I don't buy it. It gets back to management and risk- taking, and you can screw that up at a small bank or a large bank." Harrison added that he would "hate to see the anger toward bankers lead to a breakup of big banks and the efficiencies they bring to the U.S. financial system," Reuters wrote.

Retired Wells Fargo CEO Richard Kovacevich preferred word play: "Why this concept that investment banking is risky? Invesment bankers are risky, not investment banking"—an approach one journalist described as "Rumsfeldian existentialism."

And then there is retiring Sen. Chris Dodd (D-CT), who certainly knows what side his frank is buttered on: It's unrealistic to tihnk about breaking up the banks, he told CNBC. And anyway, Weill's real message is that banks will be worth more if they break up into smaller pieces. Examiner.com's Dominique Doms also engaged in a bit of "What Weill really meant to say was...": "What Mr. Weill meant was that the current financial structure of both US and international banks needs an adaptation mechanism... There really is no need to turn the clock back in time."