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Advocates at NCSL in Atlanta Speak on Resolution to Restore Glass-Steagall
14 August 2013
(LPAC)—The following speeches were delivered at the National Conference of State Legislators in Atlanta, GA by advocates of the restoration of the 1933 Glass-Steagall Act, HR 129 in the U.S. House of Representatives, and S 985 and S1282 in the Senate. There are currently 25 state legislatures in the nation that have introduced resolutions demanding their congressional delegation supports Glass-Steagall and the restoration of Glass-Steagall is an official agenda item being debated at the conference. Many of the sponsors of the 25 resolutions are in attendance of the week-long NCSL event. Also in attendance at the conference are LaRouchePAC Policy Committee members Diane Sare (NJ) and Bill Roberts (MI). One Monday, August 12, Deleware State Senator Catherine Cloutier delivered the following address to the NCSL Committee on Communications, Financial Services and Interstate Commerce Hearing on the Resolution to Restore Glass-Steagall. Speaking after her was State Senator Perry Clark of Kentucky, and former State Representative, Lamar Lemmons of Michigan. DELAWARE SEN. CATHERINE CLOUTIER: Good afternoon.
I’m here to motivate the passage of the resolution that calls for the reenactment by the U.S. Congress of the Glass-Steagall Act of 1933. I have elected to share my time with State Sen. Perry Clark, who’s a Democrat from Kentucky, and LaMar Lemmons, who’s a long-term former State Rep., and now President of the Detroit School Board. I also have a fact sheet that’ll answer a lot of questions. I did cut my notes up for my talk drastically, to allow more time for others. There is no more urgent legislation facing the United States today than the restoration of Glass-Steagall, which was unfortunately repealed in 1999, when Wall Street gave $350 million to the Congress to repeal it. SLIDE #1 [FDR signing Glass-Steagall, flanked by Sen. Carter Glass, Congressman Henry B. Steagall and others] The two most important features of the original Act of 1933, which you see here being signed by Franklin Roosevelt, were: NUMBER 1: separating sound Commercial Banking activity from Investment Banking, which is entirely speculative; and NUMBER 2: establishing Federal Deposit Insurance by the FDIC, to insure the commercial bank deposits of all the American people. In other words, no gambling with bank depositors’ money, and no deposit insurance for the gamblers in Investment Banking. In doing both, it contributed greatly to restoring confidence and stability in the banking system, and thereby the economic recovery from the Depression. Because the 1999 repeal dissolved that separation, the door was opened for 1) creation of the biggest financial bubble in history; 2) the collapse of that bubble in 2007 to 2009, and the biggest taxpayer bailout in history; and 3) with the new collapse about to hit, the plan for bail-ins of banks, as mandated by the Dodd-Frank bill. Now I’d like to tell you the history of how the original Glass-Steagall Act was enacted to help us summon up the wisdom, the courage, and the resolve to do it again. The passage of Glass-Steagall was almost entirely the result of a combination of the courageous work of two fighters: Pecora and FDR. SLIDE #2 [Ferdinand Pecora on left vs. J.P. Morgan and 2 others leaving Pecora hearings on the right, with headline When WASHINGTON TOOK ON WALL STREET. Note: This slide remained on for all three speakers.] Ferdinand Pecora got crucial backing from FDR. He was hired as chief counsel for the Senate Banking Committee on Jan 22, 1933. At that time, we were in a total depression. By March 3, 1933, 38 states had been forced to declare bank holidays to try to stem panic. Pecora kicked off the hearings with a subpoena to Charles Mitchell, head of National City Bank, then America’s largest bank. (It’s now known as Citibank.) Sunshine Charlie was the Jamie Dimon of his day. After Pecora grilled Mitchell and his men for 10 days, Charlie Mitchell walked out of the hearings alone, discredited, a broken man, and resigned as chairman of City Bank. His admission on the witness stand led to his subsequent arrest for tax evasion. J.P. Morgan was next. Pecora put Morgan on the witness stand in May, and made him admit, after relentless grilling, that he and a lot of his Morgan Partners had paid NO TAXES for the last 2 years. The people of the nation had had enough. Glass-Steagall swept through the Senate by voice vote; the House followed, by 191 to 6, and FDR signed the new law on June 16, 1933. This opened the way for President Roosevelt to pour credit, through the newly reformed, sound banks: · to put millions of people to work, · reopen the factories, · build the TVA, · the Hoover Dam, · and thousands of other projects. THIS IS WHAT WE NEED TO DO!!! [Holding up recent Time magazine, "Is Your City Next?"] Just look at Detroit — and your city, and your state, could be next! The city of Detroit is being forced to pay the big banks hundreds of millions of dollars in interest rate swap bets — gambling debts. Meanwhile, the retired policemen, firemen and city pensioners of Detroit are told to live on 10 cents on the dollar: they are supposed to live on a $3,000 a year pension, with no Social Security! 25 states this year have introduced resolutions calling for the Congress to restore Glass-Steagall. In Delaware, 10 of the 21 State Senators, including myself, introduced a pro-Glass-Steagall resolution. Why? Because they know the Congress is listening. In the U.S. House of Representatives, there are now 75 co-sponsors of the bill to restore Glass-Steagall. And in the last month, 10 U.S. Senators have joined in. I’m calling on you to restore the Glass-Steagall Act! PERRY CLARK:
We know now what the outcome was of knocking down the wall of Glass-Steagall. From 1933 until 1999, we had a relatively secure commercial market. We did not hear things like this — and I’ll just read these news reports — just like you see here. Here’s yesterday: "JPMorgan Chase files quarterly report with the SEC" if there ever was an argument of making a convincing case against breaking up the big banks and restoring Glass-Steagall, it is dead — "JP Morgan reported it is under investigation by the Justice Department in six separate areas being pursued by multiple state attorneys general." We all know this! This is going on in our state! And, they’re also in trouble with the LIBOR. Does anyone remember the LIBOR manipulation of the stock markets? "JP Morgan says the Justice Department is one of the multitude of bodies that are investigating their potential role in the rigging of the interest rate benchmark used to set the interest rates on trillions of dollars of loans in derivatives around the world," and it cuts back to our states, we’re going to owe that money! More articles, this is all recent news right here... This is the New York Times, right here: "The case also comes at a time when JP Morgan, which recently reported record quarterly profits, is already grappling with an array of regulatory woes." The bank has got six inquiries, minimally, into it — we know that. The cat is out of the bag! When Glass-Steagall was knocked down, we allowed the commercial and the investment banks to get together. It’s a rigged game, people. We must put that wall back up, and separate them now. We can figure out what kind of regulatory scheme we need after that. What we had with Dodd-Frank is not working. Give me just a minute. I do hope you have time to hear from Mr. LaMar Lemmons, here, who is the President of the School Board of Detroit, and he knows what these casino swap rates are costing Detroit. It’s just not bad management, it’s a bad financial manager. The cat’s out of the bag! Twenty-five states have introduced these legislations to restore Glass-Steagall. Congress has a bill in both the Senate and in the House. You have ten Senators cosponsoring. And my Congressman from Louisville obviously is one of the sponsors in the House — you have seventy-five cosponsors. It is growing daily. People are seeing what is going on with the markets, and we can no longer bail out the banks and not bail out the people. We save the people — a lot of the banks can fend for themselves! We put the Glass-Steagall back in place. I ask for everybody’s courage, I ask for everybody’s commitment. It’s going to be difficult, there’s going to be millions of dollars spent against this up in Washington to stop this from happening, but this is the only thing I see that’s going to save the people of my district, and maybe even to build the infrastructure of the United States so we can leave a future for our children. And that’s what we’re here for. That’s who you vote for. LAMAR LEMMONS:
Now, our city has recently filed for bankruptcy — but not in the traditional manner! Not with the mayor and the city council. It was an imposed bankruptcy, imposed by the state. The fact that Glass-Steagall was repealed caused our pensions to be undermined and under-financed. And as a direct result, our firefighters you can’t cut your way! We cut our firefighters down, and some of them, both firefighters and policemen, start at $14 an hour! With a family of four, they’re eligible for food stamps. You can’t have an austerity budget to eradicate. Unless you re-erect Glass-Steagall and stop the bleeding, our pensioners have now been made vulnerable. Although our state constitution guarantees the pensions, when we go to federal bankruptcy court, all bets are off. So I’m just here to ask you to send to the larger body, for deliberation, this resolution for Glass-Steagall. Thank you. |
