Financial Crisis

The Housing and Financial Meltdowns Revisited

Five years after the housing and financial meltdown, self-styled progressives are still peddling the Glass-Steagall pseudoexplanation.

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Five years after the housing and financial meltdown, self-styled progressives are still peddling their pseudoexplanation: that it was largely the fault of the 1999 repeal of a provision of the New Deal–era Glass-Steagall Act, which mandated the separation of commercial and investment banking. This tale is favored by Sen. Elizabeth Warren and others of her ilk, who hold the rather absurd view that the United States had free banking between the 1980s and the passage of Dodd-Frank in 2010. (See this video in which Warren attributes the growth of the American middle class to Glass-Steagall and the middle class's decline to the repeal.)

One wonders if Warren et al. ever bother to look at the facts, particularly the passage of Glass-Steagall and what, if any, role the repeal actually played in the crisis. Since they never say anything specific, it's hard to know if this is anything more than an incantation designed to blame the "free [sic] market" and to bolster their case for bureaucratic management of our lives (which they call "the economy"). It takes Herculean ignorance or dishonesty to claim that America had free banking before 2010. Hence, this is a classic confirmation of my observation that no matter how much the government controls the economic system, any problem will be blamed on whatever small zone of freedom remains.

According to folklore, Glass-Steagall was passed because of rampant conflict of interest and abuse among banks that both served savers and borrowers (commercial banking) and underwrote and sold securities (investment banking). But this is a case of the victors writing the history.

In "The Rise and Fall of Glass-Steagall" (2010), economists Jeffrey Rogers Hummel and Warren Gibson explain that Sen. Carter Glass realized his long-held goal of separating these two banking functions only after the 1933–34 so-called Pecora hearings in the U.S. Senate. (Ferdinand Pecora was chief counsel of the Senate Banking and Currency Committee.) "Revelations of supposed abuses by National City Bank (NCB) of New York and its president, disclosed in the Pecora hearings, provided the spark to ignite the issue and give Glass his victory," Hummel and Gibson write. But the revelations revealed nothing terribly substantial against NCB or its subsidiary, National City Company (NCC).

Among the more serious charges, executives allegedly profited from the firm's own securities underwritings. For example, National City bought a large block of stock in the new Boeing Corporation. Rather than sell this stock to the public, Pecora charged that NCC "retained a large block for itself and allotted the remainder to Mr. Mitchell and a select list of officers, directors, key men, and special friends." But an internal NCC memorandum concerning this stock says,  "[O]n account of the fact this industry is still somewhat unseasoned, even though we regard this particular company as sound and having a very bright future, we were not quite ready to make a general offering to our customers. It would have been next to impossible to avoid taking orders from the type of investor who should not buy this stock. Therefore, our own family and certain officers and employees of the Boeing Co. and affiliations have taken the entire issue."

On which Hummel and Gibson comment, "Not only does this not sound improper, but in fact it sounds like just the sort of prudent regard for customers' best interests that was supposed to be lacking in combined firms such as NCB/NCC." It certainly was not a case of a bank peddling dubious securities to gullible customers.

However, they continue,

The committee produced a Mr. Brown, a witness who claimed to have lost $100,000 as a result of an NCC salesman's bad advice. Bankrupt and in ill health, Mr. Brown was an ideally sympathetic witness, but it turned out that he had been a successful businessman and not a novice. NCB was forbidden to call rebuttal witnesses.

Economist George Bentson looked into the complaints against NCB and Chase Bank in his The Separation of Investment and Commercial Banking (1990) and concluded that they had no sound basis. Bentson "added a thorough critique of the supposed theoretical problems of universal banks such as conflicts of interest," Hummel and Gibson write, continuing,

But what about conflict of interest? It is certainly possible that a banker in a combined firm might steer customers into ill-suited investments or insurance products. This is a hazard we face whenever we deal with professionals, such as physicians who advise treatments and also provide them, or lawyers who advise lawsuits and offer to file them. Such hazards are manageable: We can always get a second opinion or consult a fee-based financial planner or simply rely on the professional's incentive to maintain a reputation for ethical service.

A few anecdotes and the potential for a conflict of interest were hardly good reasons for the government to arbitrarily separate financial functions, depriving customers of the benefits of integrated services. Hummel and Gibson write,

Financial institutions have widened their offerings considerably in recent years without any apparent problems. At the website of Wells Fargo Bank, for example, one finds not only traditional deposit and savings accounts and loans of all sorts, but also stock brokerage, mutual funds, automobile insurance, homeowner's insurance, and even pet insurance. (But the Wells Fargo branch in a nearby Safeway store didn't catch on and was closed.) Similarly, Charles Schwab, which began as a discount broker, now offers a full range of investment products and advice as well as banking services through its affiliated bank. Customers enjoy expanded services and lower prices as a result of the widening of competition among traditionally distinct firms. There is no sign of significant or widespread problems arising from conflicts of interest in such firms.

Hummel and Gibson add that success is not guaranteed for such companies, and they discuss some notable failed attempts by large firms to offer assorted financial services.

While the relevant part of Glass-Steagall was repealed in 1999, Hummel and Gibson point out that it was "becoming a dead letter" well before then. The repeal mostly codified reality.

"Incidentally," they write, "no other developed country has ever seen fit to separate commercial banking from investment banking. Banks in Germany and Switzerland have always been free to engage in underwriting and securities holding to no obvious harm." Aren't we often told that Europe is much more enlightened in such matters?

This is hardly to suggest that all was well with banking before Dodd-Frank. Not by a long shot. The industry was a corporatist monstrosity, a cartelized  affair that included government deposit insurance, which protects banks from conscientious depositors who would otherwise scrutinize their lending practices. But the 1999 repeal of one section of Glass-Steagall was not among the problems. (Then-Rep. Ron Paul, an advocate of free banking, voted against the repeal because no related privileges were abolished. I respect that argument, but that is different from blaming the meltdown on the repeal, which Paul does not do.)

If the repeal of Glass-Steagall is acquitted in causing the 2008 meltdown, what did cause it? Hummel and Gibson respond,

The crisis began with the housing collapse, a result of government encouragement of unsound lending practices. Financial firms took too much risk with mortgage-backed securities, in part because of moral hazard engendered by government guarantees and partly because bond rating firms were not as independent as was once thought. The limited liability that the investment banks gained when they became corporations may also have amplified moral hazard. There is no good reason to believe that Glass-Steagall, had it remained in effect, would have prevented any of these problems.

Peter Wallison of the American Enterprise Institute fills in the picture when he writes,

In 1992, Congress adopted the ironically named Federal Housing Enterprises Financial Safety and Soundness Act, also known as the GSE Act, giving HUD the authority to administer the legislation's affordable housing goals. The law required Fannie Mae and Freddie Mac, when they acquired mortgages from lenders, to meet a quota of loans to borrowers who were at or below the median income where they lived. At first, the quota was 30%, but HUD was authorized to raise the quota and over time it did, eventually requiring a quota of 56%. [Emphasis added.]

The result of this and related policies? "At the time of Lehman's failure [in 2008]," Wallison writes, "half of all mortgages in the U.S.—28 million loans—were subprime or otherwise risky and low-quality. Of these, 74% were on the books of government agencies, principally the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac."

On their face, these numbers suggest that the government's housing policy had created the demand for these mortgages, and thus had something to do with Lehman's failure and the financial crisis. But in recent days nearly all articles have focused on the 26% of mortgages that were the responsibility of the private sector. It is as though the vast majority of the subprime mortgages that the government bought didn't exist.

For more on HUD's role see my "Clinton's Legacy: The Financial and Housing Meltdown."

Many people are determined not to see the government's central culpability in the crisis that produced and continues to produce so much hardship. They rather believe that deregulation and greed were the culprits. But the fact remains: Wall Street couldn't have done it alone.

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163 responses to “The Housing and Financial Meltdowns Revisited

      1. That should be B5DAD.

        1. I hate it when people transpose my binary solos to hex.

          YOU DON’T UNDERSTAND MY ART!

        2. 2BB4UR

  1. They have to blame it on Glass-Steagall to make sure nobody notices that it was the combination of Basel and Federal Reserve policy.

    Basel assigned MBS a more favorable capital weight than whole loans in portfolio. The theory here was that encouraging banks to hold securities instead of whole loans would insulate the larger banks from local or regional real estate market reverses. It was a good theory, based on the type of bank and thrift failures we’d historically seen. But it eliminated regional failure risk by spreading that risk over the system as a whole.

    That meant as soon as the Fed fucked up and created a housing bubble, the consequences of that action were spread across the entire system. We couldn’t just let a bunch of California, Nevada and Florida banks die this time, because those banks had transferred their risk to every other institution in the form of securitized mortgage loans.

    Boom.

    1. Well, even that would not have happened had Moody’s, Fitch, and S&P not rubber-stamped AAA on all those rotten securities.

      1. They did so because underwater mortgages that were bundled with others that still had equity were allowed to be reported as zeros on the balance sheet. The power of Fannie and Freddie to enact such a rule prevented investors from seeing the actual values.

        But, as usual, PB manages to absolve the almighty government (genuflect when you say that!) of any blame for a situation that was largely, if not entirely, its fault. But, hey – at least everyone got to own a house.

        Now where’s my pony???

        1. Affordable Housing Requirements/CRA/ridiculously low interest rates

          You get what you incentivize.

          That is all.

      2. They weren’t rotten securities based on any statistical analysis that existed prior to 2007.

        That’s what you have to try to understand.

        No matter what practical underwriting rules had been established, you can’t expect a ratings agency to ignore the statistical reality of a 15 year period of declining foreclosure rates.

        We live in a positivist age, and statistics trump everything.

        You had loans that were performing, cut into tranches where the riskiest parts reverted to the issuer, and where the issued parts were insured by third party firms that themselves had AAA credit.

        It’s a neat little system, and I’m sure the regulators who set it up (and every last piece was set up in response to deliberate regulation) thought it was pretty clever.

        Until it all blew at once.

        1. There was at least one of the rating agencies that was so positive that their computerized rating system did not have any way to input negative housing prices. Housing prices always went up according to them so it was always a good investment.

        2. No matter what practical underwriting rules had been established, you can’t expect a ratings agency to ignore the statistical reality of a 15 year period of declining foreclosure rates.

          Bullshit.

          Underwriting standards were completely ignored by the early 00s and were an essential element of the bubble.

          The idea that the bundlers and rating agencies just had no idea that people were lying about their income is horseshit. The system that they created incented lying by blindly accepting it and getting a slightly higher interest rate for those products.

          1. Underwriting standards were completely ignored by the early 00s and were an essential element of the bubble.

            They were ignored by the early 00s because, other than a blip in New England and California in 1994 that was handwaved away as regional statistical noise, foreclosure rates dropped steadily for all categories of loans, including no doc.

            We may sit there and say now that it’s obvious that getting rid of income verification and pricing loans based on credit score alone is absurd. And I bet a lot of people at planning meetings in 1995 said that too. But the guys who were advocating that change had the statistics on your side.

            And in risk modeling, there is no such thing as common sense. There is only statistical performance.

            The liar loans performed well enough to be bundled into securities for a decade. During that decade, the pricing premium for Alt A continually declined, until in the end Fannie and Freddie automated underwriting stuff essentially WAS Alt-A under a different name. But every step of that process happened because at the time it made statistical sense.

            1. Sorry, a couple of typos.

              That should read “…from 1983 on, other than a blip in New England…etc.”

              And:

              “…had the statistics on their side.”

            2. They were ignored by the early 00s because, other than a blip in New England and California in 1994 that was handwaved away as regional statistical noise, foreclosure rates dropped steadily for all categories of loans, including no doc.

              And the fact that non doc loans were extremely rare outside of CA and NE before the 00s was considered irrelevant.

              And in risk modeling, there is no such thing as common sense. There is only statistical performance.

              Which is a serious flaw in risk modeling.

              The liar loans performed well enough to be bundled into securities for a decade.

              Sure, as long as the bubble was inflating they performed fine because the underlying asset could always be sold at a profit.

              The missing common sense observation was that the bubble would not keep inflating forever and would reach a turning point eventually.

              Ultimately, the bubble inflating was self justifying by the risk analysis.

              1. They were meant to be performing risk analysis, which nominally contains at least two parts:
                A – chance of failure.
                B – size of possible failure.

                During the 00s foreclosure rates were dropping, A was decreasing.

                During the 00s debt levels were soaring, B was increasing.

        3. Ah, therein lies the rub… The statistical risk analysis they were using was and probably still is, wrong.

          1. Bean-counted statistics always talks about what ‘was’ the case for things. It is not and cannot be predictive by itself. Which only means that it works until it doesn’t. Or until the circumstances change faster than the smoothed and aggregated data representation can deal with.

            At such times you’re using human judgement. And at all other times, you’re still using human judgement. Which is Fluffy’s entire thesis. Humans screwed the pooch.

            But then that’s the point behind every law. And why authors of law write boggled nonsense. Why their esteemed colleagues vote in favor of the proposed law. And why the drunks in Supreme Court call it good.

            But the housing problem was just two issues. One was just a math problem. The same one that defines fractional reserve banking. So let’s not mention that unmentionable further.

            The second is the idea that debt is good collateral for debt. But that’s the same idea underneath Treasury Bills and Federal Reserve Notes. So let’s not mention that unmentionable further either.

            The only difference between the housing problem and the currency/banking problem is that one got caught out on the wrong side faster.

      3. Those rotten securities were underwritten by federal tax payers. Were credit reporting agencies wrong in recognizing that guarantee? Did the government not bail out holders of those rotten securities? Cut the circular logic.

    2. Add to that a global market looking for places to park huge amounts of cash when the Federal reserve was only paying 1% and you’ve got a burgeoning market for investment banks who were looking for anything they could to fill the demand. And let’s not forget the role of the ratings agencies who were rubber stamping everything that came across their desk as AAA rated with the expressed blessing of the government. Nor shall we forget the naked credit default swap market, which was larger than the actual bond market (with next to no reserves) and reflected a Wall Street gone full casino with the blessing of the government.

    3. They have to blame it on Glass-Steagall to make sure nobody notices that it was the combination of Basel and Federal Reserve policy.

      Beat me to it.

      There were about 12 regulatory rulings that combined to form this perfect storm.

      And the Basel risk weighting of MBS vis a vis intact mortgages is largest contributing factor – and just about everyone ignores it.

      1. And then Europe compounded this and did the same thing with Soveriegn debt. Bam, Euro crisis.

  2. Although Glass-Steagall has taken on mythic proportion in the progressive ranks, Elizabeth Warren certainly does not hold the position that the 2008 financial crisis was “largely the fault of the 1999 repeal of a provision of the New Deal?era Glass-Steagall Act”.

    When I called Ms. Warren and pressed her about whether she thought the financial crisis or JPMorgan’s losses could have been avoided if Glass-Steagall were in place, she conceded: “The answer is probably ‘No’ to both.”

    Still, she said that the repeal of the law “had a powerful impact to let the big get bigger.” She also contended that its repeal, brought about by the Gramm-Leach-Bliley Act, “mattered enormously. It is like holding up a sign to regulators to back up.”

    http://dealbook.nytimes.com/20…..or-crisis/

    (Even the NY Times is debunking the myth).

    Of course, even more absurd is the wingnut myth that “forcing banks to loan money to blacks” was the cause of the 2008 crisis. That lie is pushed by conservative talk bullshitters 24/7.

    1. Most of us would agree that it was a convergence of several things that enabled the bubble to exist, however the government had its fingers in almost all of those things, most of all the Federal Reserve and the GSEs.

      And let’s not forget that the ratings agencies were a creation of the SEC and legally required for these funds. The Big Three occupied 95% of the market with the full blessing of the SEC which did not see fit to challenge them in the least.

      1. And if the SEC did challenge them, it would be on the bases of political expediency and not accuracy. Look what’s happened every time a ratings agency has suggested downgrading the credit of a large country.

      2. Your argument is sound but if the SEC had challenged the Big Three instead of watching porn on their laptops Reason.com would have attacked the SEC as a heavy-handed government bureau.

        One of the good things that came out of Dodd-Frank is that the Credit Raters can now be sought for civil damages due to poor risk rating.

        In 2008 their shabby record was protected as an “opinion” only.

        1. Palin’s Buttplug|10.13.13 @ 8:40AM|#
          “Your argument is sound but if the SEC had challenged the Big Three instead of watching porn on their laptops Reason.com would have attacked the SEC as a heavy-handed government bureau.”

          Yes, and you would have taken the opportunity to invent and defend even more government programs, all the while lying about how you really want freedom!

          1. I am not an anarchist. Government is far too large and should not be involved in most of the programs it is but regulators do serve an important purpose sometimes (see Hayek).

            Yes, I know, you wingnuts don’t like me playing the Hayek card on you but you often deserve it.

            1. Palin’s Buttplug|10.13.13 @ 11:48AM|#
              “I am not an anarchist.”

              We know. You’re a lying, lefty ignoramus.

            2. Whatever the good kinds of regulation are (maybe basic pollution control, occupational safety), economic regulation is not one of them. Fuck the SEC, FTC, FDIC, and STB.

        2. One of the good things that came out of Dodd-Frank is that the Credit Raters can now be sought for civil damages due to poor risk rating.

          Tell me, how risky is it when the federal government underwrites your risks? Weren’t the holders of those rotten securities bailed out, repeatedly?

          You seriously want to blame the reporting agencies ahead of the GUARANTORS of those “rotten securities”?

    2. Even the NY Times is debunking the myth

      The lack of self awareness can be funny it is so absurd.

      The paper of Leftard record repeats Leftard talking points? Next you will tell us how National Review takes a position opposite of the one you believe. Who would have guessed?

      1. You got it 100% again.

        The Times is debunking the PROGRESSIVE myth about Glass-Steagall.

    3. If it involves blaming the Blacks, it is racist. And if it is racist, it can’t be true.

      1. who is blaming blacks?

    4. You do know that it wasn’t just black people that got those loans? Thus criticism for the CRA on this website is not predicated on race. But you’re a total demfag so RACIST is your go to argument.

      1. The only time I’ve heard “forced loans to blacks” arguments, is when Progressives claim that is the counterargument to their orthodox view. I’ve only ever seen that argument made of straw and I sincerely doubt that anyone has actually used it outside of stormfront.

    5. Still, she said that the repeal of the law “had a powerful impact to let the big get bigger.”

      LOL that’s the whole point of the policies that Warren advocates.

    6. The right-wing-nuts like to blame everything on the CRA. The left-wing-nuts like to blame everything on the repeal of Glass-Steagall. Both are wrong, and the only saving grace for the righties is that the CRA was a real, if minor, factor in the meltdown. (Glass-Steagall was modified, but hardly repealed.)

      It’s certainly true that government policies encouraged loans to people who weren’t qualified. Interest is the price of debt. By holding interest rates below market prices, the government subsidized debt. It’s pretty widely accepted that if you subsidize something, you tend to get more of it. Hence, we got lots more debt.

      The problem with the credit raters was that they were paid for by sellers, because they were legally required in many cases. Credit raters paid for by buyers would never have made such egregious mistakes. (Not for long, anyway.) Just think about it. Let’s say you’re buying a used car. Would you trust a mechanic paid by the seller of a car, or one you were paying yourself? Just think about who is more likely to act in your interest.

      The feds should have let the “too-big-to-fail” institutions go bankrupt in an orderly manner instead of propping up their flawed business models. The short-term pain might have been greater, but the long-term damage to the economy would have been far less.

  3. Roll that beautiful bean footage!

    http://www.GoGetPrivacy.tk

  4. Glass-Steagall doesn’t matter in a system where the government is willing overnight to turn a investment bank (Goldman Sach) into a commercial bank and bail them out

    Investment banks were suppose to have no government support so they could risk what they wanted and if they failed then that was their problem. But Too Big Too Fail trumped that.

  5. Hence, this is a classic confirmation of my observation that no matter how much the government controls the economic system, any problem will be blamed on whatever small zone of freedom remains.

    Yep. Govt to the liberal is like God to the conservative. It is Good and all evil comes from rebellious individuals, which is why there is evil in the world despite an all good and powerful Govt/God.

  6. Are Islamic terrorist agents now once again conducting “dry runs” on American flights? A pilot union internal memo says that this may in fact be the case.

    The union memo, titled “9/11 Security Update,” went on to detail one “typical example” that happened on a US Airways flight to Orlando International Airport (MCO) originating at Ronald Reagan Washington National Airport (DCA) in Washington, DC.

    “A group of Middle-Eastern males boarded in DCA. Shortly after takeoff, one got up and ran from his seat in coach towards the flight deck door. He made a hard left and entered the forward lav, where he stayed for a considerable length of time! While he was in there, the others got up and proceeded to move about the cabin, changing seats, opening overhead bins, and generally making a scene. They appeared to be trying to occupy and distract the flight attendants.”

    “Coincidence?”

    Both US Airways and the Transportation Security Administration (TSA) verified the incident.

    1. Don’t you dare do anything about it, thath rathithm!

    2. And interesting details:

      It just so happens that on the return flight from MCO – DCA, with the same flight number, a group of 8 Middle Eastern females — concealed in full burkas — were in the boarding area for the flight to DCA. This flight did not have a (Federal Air Marshal) team, even though it was supposed to have a significant VIP aboard. (He was rebooked when all these details were made known to his security detail.)

      1) Air marshals are assigned to flights to protect specific passengers?

      2) Informations about which flights air marshals are on is given to certain people’s personal security, in advance, along with details about other passengers?

      1. The fact that they put this VIP on a different flight is very interesting indeed. That tells me that there is something to these incidents, and the givernment knows it.

        1. So was “givernment” a typo or intentional?

          I’m using it either way.

      2. I kind of read that as “the VIP was rebooked because an air marshal was not on the flight”.

    3. This flight did not have a (Federal Air Marshal) team, even though it was supposed to have a significant VIP aboard. (He was rebooked when all these details were made known to his security detail.)

      Thank God they rebooked that “significant VIP”, so only the peasantry would have died!

  7. As a libertarian, I am in the uncomfortable place of supporting Glass Steigel. My support is due to the FDIC guarantees on client bank deposits. With the FDIC guarantees, the depositor only cares about their yields. They have no care about the stability of the bank. If the bank fails, the FDIC will come to the rescue. So the bank can make very risky investments using capital priced at risk free rates. If the investments work out, the depositors and bankers make out like bandits. If they fail, the FDIC just prints up some more money to cover the losses. What could go wrong?

    1. What these libertarians don’t understand is that human behavior isn’t always rational. If the FDIC doesn’t insure the money, a lot of people won’t put it in the bank, they will hoard it and it won’t do the economy any good.

      1. “they will hoard it and it won’t do the economy any good.”

        Personally, I find gold coins the best currency in which to take a swim!

        1. While I do have some gold, it’s silver and ammo for me.

          1. Werewolf problem in your area?

      2. If the FDIC doesn’t insure the money, a lot of people won’t put it in the bank,

        That’s why nobody will put money into credit unions, right?

      3. Private insurers would never insure a bank. Nope, not ever. And even if they did, they would have no incentive to ensure that they didn’t stand to lose a boatload of money by insuring irresponsible institutions. Derp.

        The FDIC not only has no incentive to police the institutions they insure, they aren’t allowed to.

      4. Banks or independent private insurers can always handle the same insurance, and it will cost less without government inefficiency. There’s no excuse for government handling it, except for the religious faith that government is always more competent than private businesses, which is hardly an actual argument.

      5. Libertarians can’t read. Yes, private insurers can insure a bank. I’m not even saying I think the government can do a better job than a private insurer. IT DOESN’T FUCKING MATTER BECAUSE PEOPLE WILL ACT IRRATIONALLY. They don’t want to loose their money if the private insurer goes bankrupt.

        1. While I agree that the evidence is overwhelming that people, as a whole, do not act rationally in the marketplace; however, I fail to see why this logically entails government paternalism, as is often argued.

          1. -I fail to see why this logically entails government paternalism

            Indeed, since these government regulations will be made and administered by similarly irrational people, no?

            1. Haven’t you heard? It’s only the profit motive that renders one irrational. Attempting to create utopia on Earth is a purely rational and well-thought-out endeavor.

              1. Yes. I can buy that people act irrationally at times in markets. But at least in a free market there will be incentives pushing people towards greater rationality. Government bureaucrats, who usually are insulated from their decisions, have nothing to act as a brake on their irrational commands for the rest of us.

                1. The US hasn’t had free market banking for 150 years (or ever, actually).

          2. Well if people are just left to make choices on there own then something SAD might happen to someone, somewhere, maybe even a child, which means naturally we must surrender our freedoms to Top Men to make sure there are no SADZ.

            1. Indeed, because of course nothing sad has ever happened to someone, especially children, because of governments curtailing people’s freedoms. Just ask German Jews, or Native Americans, or Ukranian farmers, or blacks during Jim Crow…

        2. IT DOESN’T FUCKING MATTER BECAUSE PEOPLE WILL ACT IRRATIONALLY. They don’t want to loose their money if the private insurer goes bankrupt.

          That sounds rational.

        3. You still haven’t told me how this is the Mexican’s fault American.

          I feel like you’re losing your racist touch.

        4. “IT DOESN’T FUCKING MATTER BECAUSE PEOPLE WILL ACT IRRATIONALLY.”

          WHICH IS FUCKING IRRELEVANT!

          1. This is always a funny argument: “People aren’t rational, so we need regulation!”

            Really? And, what, prey tell, accomplishes rational regulation? It wouldn’t happen to be… people, now,… would it?

            Politicians don’t have any more rational self interest in doing what’s best for the economy, than any other kind of person. Why are they always magic people who overcome human nature?

            This is why it so often sounds like they think government is god: they make all these global claims about human nature (i.e., irrational, predatory, etc.), and then treat government as it it’s above and beyond all of these things. Unless it’s composed of supernatural beings or aliens, then, I’m sorry, but the pessimistic human nature assumptions still apply. If that’s the problem, then government isn’t a solution.

        5. The libertarian fail wrt deposit insurance is the fraudulent and therefor anti libertarian nature of fractional reserve banking.

          1. Deposit insurance is whack, and so are the rationalistic, half-baked arguments against fractional reserve banking.

            Rothbard was a simple quack and a hack plagiarist; how exactly you are supposed to regulate banks (to prevent fractional reserve lending) in a system of anarchy, Rotbard never bothered to tell us; likewise, he never bothered to consider how an economy could function with banks that were not able to lend money, since in his bizarre fantasy they would be relegated to the position of warehouses.

            Rationalism is the epistemology of mysticism, so it’s not surprising that Rothbard would come up with such ludicrous theories. If you want to advance capitalism and freedom (seriously), dump Rothbard.

            1. I agree. It’s like mini-storage; they’re all the time lending out property in their care, and splitting the rental fee with the property owners. And if a property owner wants to retrieve, say, his sofa, but it’s been lent out, then the mini-storage manager takes a sofa from another customer, and everything works out just fine.

              There’s no way that banks could make money if they weren’t able to seize people’s property and lend it out. I mean, how could a bank possibly stay in business by merely renting out safety deposit boxes while lending only its own capital to borrowers? It just couldn’t happen.

            2. ideally customers with distaste for fractional reserves wouldn’t invest in banks with such a policy.

        6. Eliminating moral hazard creates a far greater deal of irrationality than leaving market participants to take care of their own back ends. Of course, you already knew that.

        7. That’s actually rational behavior.

          It’s behavior you don’t like, because you want all savings to be available for the capital markets in as liquid a form as possible.

          But that’s your preference. It’s not reason.

          It’s completely rational behavior to seek to control one’s assets in the absence of a third party you TRUST who can intermediate them into the capital markets for you. Completely.

        8. Also, since the Menger revolution, economist have no need to rely on the rationality of participants as a measure of market viability though socialist still believe by tackling the ghost of Adam Smith they are making progress against capitalism. Ironically, game theory inserted rationality of participants based arguments back into the field of economics. The primary reason that game theory is a bad fit.

        9. Prior to the FDIC banks were capitalized and advertised this fact.

          They would show how much money was backing their operations and, in good banks, it was always more than enough to cover deposits.

      6. hat these libertarians don’t understand is that human behavior isn’t always rational. If the FDIC doesn’t insure the money, a lot of people won’t put it in the bank, they will hoard it and it won’t do the economy any good.

        I think you’re confusing the notion of rational with globally optimal.

        Being rational doesn’t imply that everyone collectively coordinates and does whatever is “best” for the economy.

        The notional of “best” implies optimal based on some criteria (which is not defined here).

        It is not in everyone’s rational best interest as an individual to optimize every function defined over society as a whole.

      7. they will hoard it and it won’t do the economy any good.

        So. Fucking. What?

      8. Wrong-o. Without FDIC (or with REAL insurance, where premiums are based on risk) people will put their money in the most stable and responsible banks. Banks that insist on reckless speculation will see their deposits evaporate. Banks that take good care of their depositors will see their balance sheets swell.

        Pumping money into irresponsible institutions is a net loss. Bank runs are an entirely rational response to irresponsible behavior by bankers. Individuals may be irrational, but the mass of people tends to be quite rational in the aggregate. Treating everyone as if they were irrational only results in more mindless paternalism.

        1. The idea of using money to ensure money is about as sensible as exercising eminent domain on money and compensating with money.

          If the bank only has 10% assets-to-liabilities, then the insurer has to have more money than the bank does. Which argues strongly against the entire idea long before you ask where the Insurer deposits their money.

      9. “If the FDIC doesn’t insure the money, a lot of people won’t put it in the bank, they will hoard it…”

        How is this not a form of rational behavior? Rational only means that an individual assesses a situation and comes to a conclusion about it.

      10. What these libertarians don’t understand is that human behavior isn’t always rational.

        When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man. Since nobody is in a position to substitute his own value judgments for those of the acting individual, it is vain to pass judgment on other people’s aims and volitions…The critic either tells us what he believes he would aim at if he were in the place of his fellow; or, in dictatorial arrogance blithely disposing of his fellow’s will and aspirations, declares what condition of this other man would better suit himself, the critic…It is usual to call an action irrational if it aims, at the expense of “material” and tangible advantages, at the attainment of “ideal” or “higher” satisfactions…However, the striving after these higher ends is neither more nor less rational or irrational than that after other human ends.

        – Ludwig von Mises, Human Action

  8. After world war two, the government took the goal of affordable housing for returning American troops. The economy boomed. After the end of communism, the government took the goal of affordable housing for poor minorities. The economy collapsed.

    1. Flak Flak|10.13.13 @ 10:34AM|#
      “After world war two, the government took the goal of affordable housing for returning American troops. The economy boomed.”

      Yea, fortunately, the gov’t didn’t do much; they left it up to guys like Levitt.

      1. Yep. They would have been able to afford those loans without the gov.

        1. So that goal post has wheels?
          Levitt built to the market; had the loan conditions been different, I’m sure he was more than capable of coming up with a plan.
          Do we have a brand new brain-dead troll here?

          1. No because it’s American. He just isn’t talking about the mental inferiority of black people so you can’t tell.

            I also like that he says ‘the economy boomed’ and ‘government housing loans’ as if one caused the other. The American economy boomed for years after WWII because we were the only nation on the planet that had our industrial capacity intact and hadn’t lost an entire generation of workers. Americans were essentially selling goods to the entire planet while they rebuilt their countries.

            There’s a reason why that grand American economic boom lasted for about a generation. It’s because once the first generation of Europeans after WWII came of age, we no longer had a borderline monopoly on global manufactured goods.

            1. Some have said that the reason Americans can’t compete with manufacturing is that the Europeans and Japanese have newer equipment since their old stuff was bombed out. To that I ask why we don’t blow up our old machines and bomb ourselves into prosperity. I have yet to get a response other than angry sputtering.

              1. Is that from Economics in One Lesson? I feel like I remember the line.

                1. Did Germany and Japan really prosper after World War II because of the bombing inflicted upon them? They had new factories, built to replace those that were destroyed, while the victorious U.S. had only middle-aged and old factories. Well, if this were all it takes to achieve prosperity, says Hazlitt, we can always bomb our own industrial facilities.

                  http://mises.org/books/economi…..azlitt.pdf

                  1. Yeah, I love that book. Mencken actually said of Hazlitt that he was the only economist who could actually write.

                    I don’t even understand the argument about the bombed factories though. Germany and Japan weren’t outcompeting America in the years after the war. All the numbers show that America was in far better shape than either of them.

                    1. I just shared that link via email with one of the few liberal friends that I haven’t driven away. He’s a pretty reasonable guy. We’ll see if it cures him of some of his economic ignorance.

          2. Yep Yep.

    2. So it was Hitler and Stalin’s fault. (Narrowing my eyes) I have heard of these guys and I don’t like what I have heard!

    3. So government programs are fine for white people – just not others. But you are not a racist, you are a “race realist”.

  9. It would have been nice to also know what kind of people the co-sponsors of Glass-Steagall, that darling of liberals, were.

    Carter Glass was a Democrat Senator from Virginia. He was involved in, and publicly defended, the rewriting of that state’s constitution to institute a poll tax to disenfranchise blacks. Of it he said

    -When questioned as to whether these measures were potentially discriminatory, Glass exclaimed, “Discrimination! Why that is exactly what we propose. To remove every negro voter who can be gotten rid of, legally, without materially impairing the numerical strength of the white electorate.”[3] Indeed, the number of African-Americans qualified to vote dropped from 147,000 to 21,000 immediately.

    http://en.wikipedia.org/wiki/Carter_Glass

    Henry Steagall was a Democrat Representative from Alabama who attacked Herbert Hoover for being an ‘evolutionist’ and called on Protestant ministers to disavow him and who, as a supporter, was a VIP at the opening of Bob Jones University.

    1. A little more digging produced this: Henry Steagall voted against the anti-lynching bill of 1937.

      http://www.govtrack.us/congress/votes/75-1/h27

      1. Ah! They were raaaacists! Clearly that proves they must have been wrong!

        1. Indeed, when it was clearly antisemitism that motivated those two Dixiecrats to formulate legislation to get back at those “uppity big city Jewish bankers”.

        2. Protecting lynchings and disenfranchising black voters is not some mild form of ‘coded’ racism, it is abhorrent oppression.

        3. In the quote that Bo provides above Carter Glass explicitly admits to being a racist.

        4. Ah! They were raaaacists! Clearly that proves they must have been wrong!

          No it doesn’t, but if it were a conservative or libertarian expressing similar beliefs liberals would have no problem claiming that their views should be ignored due to their racist beliefs.

          If anything, Bo is simply pointing out the rank hypocrisy of the left on this issue.

          1. Yes. The liberals who champion the great and noble Glass-Steagall act should know about the kinds of fellows who came up with the bill.

            1. Don’t be silly. History doesn’t matter. Facts don’t matter. Only feelings matter, and libgressives feel that the repeal of Glass-Steagall was a bad thing.

              Deregulation of airlines and trucking may have resulted in lower prices for ordinary schmucks, but they’re still a bad thing. Never mind that “Liberal Lion” Ted Kennedy took a leading role in their repeal. They hurt organized labor and centralized power, so they’re BAD!.

              1. Deregulation of cable and radio were also bad because they allowed News Corp to exist and result in more conservative talk radio than liberal talk radio.

                Who cares if there’s a market for all of these things? The first amendment is evil unless it exists only in service to the revolutionary truth.

            2. It’s enough to make most liberals sweat with cognitive dissonance, but only stupid ones. It is a textbook ad hominem argument.

  10. Morning links?
    Hey, you too can game the program and get yer O’care subsidies!
    “Lower 2014 income can net huge health care subsidy”
    Of course, there are no perverse incentives in any programs offered by the Bringer of Light ™!
    http://www.sfgate.com/default/…..891087.php

  11. Data You Can Believe In
    …The campaign’s exhaustive use of Facebook triggered the site’s internal safeguards. “It was more like we blew through an alarm that their engineers hadn’t planned for or knew about,” said St. Clair, who had been working at a small firm in Chicago and joined the campaign at the suggestion of a friend. “They’d sigh and say, ‘You can do this as long as you stop doing it on Nov. 7.’ ” (Facebook officials say warning bells go off when the site sees large amounts of unusual activity, but in each case the company was satisfied the campaign was not violating its privacy and data standards.)…

    …But there was the potentially politically explosive matter of privacy. Unlike Facebook, where users were at least giving the campaign explicit permission to collect personal data even if they had not read the fine print, television watchers were making no such agreement. To address this, the campaign and Rentrak hired a third party to “anonymize” the data so that they would only know that the information was coming from a set-top box of somebody on the persuadable list; identifying information would be stripped away….

    1. No surprise, coming from the Most Transparent Administration in History.

      1. The campaign hired one Facebook’s cofounders. Everyone knew they would partner in some capacity. The guy probably brought the database specs with him.

        1. Hey! Dipshit comes up with an apology for the sleazy administration!
          What a surprise!

        2. How does this excuse their behavior? “Everyone knew” is not a logical defense. Everyone knows you’re a partisan hack, but that doesn’t excuse your TEAM BLUE cheerleading.

  12. Crowd storms World War II Memorial, tears down barricades!

    This might be the best news I’ve heard all year. Decent American people are finally starting to openly resist this vile, lowlife petty tyrant of ours.

    1. I saw where the GOP shutdown stopped death benefits to fallen soldiers and Obama reinstated them. That must hurt your nutty little narrative.

      1. So Obama is spending $$ he’s not authorized to spend by Congress?

        1. I think he got the Fisher House to front the money for those four soldiers. Not sure about that though.

      2. Go fuck yourself Weigel.

      3. As is par for the course both sides look silly. Conservatives and the GOP, who were all ‘bring on the shutdown’ suddenly started crying ‘what, shutting down the government means no generous military benefits will be administered, no!’ And you neglect to mention that Obama reinstated them after one of the House ‘piecemeal’ bills passed. You know, the ones he has said he will not sign until the shutdown was over.

      4. I think you meant Democrat shutdown.

      5. Between that and the Dems funding of the military; Obama seems to be heeding Septimus Severus’s advice to “always mind the soldiers and ignore everyone else”

        Not sure what exactly that says about Obama, or America, but it’s not anything good.

        1. I thought Obama was responsible for “dangerous cuts” to the military, decried by conservatives like Allen West and the Heritage Foundation?

          http://www.newsmax.com/TheWire…../id/423213

          http://www.heritage.org/resear…..on-defense

          1. No one ever said that Newsmax and Heritage weren’t full of shit. The primary driver of decreased military spending has been sequestration, not Obama spending cuts.

            1. Well, I thought Obama was to be blamed (or credited) for the sequestration. The GOP and conservatives have been long saying ‘it was the President’s idea!’

              Of course I do not trust Democrats to make any significant cuts in defense spending (or any spending for that matter). I am joking here a bit of course, having fun with conservatives being all over the place on this and other issues. A pox on both their houses.

            2. All hail sequestration, at least it cut a few billion.

          2. The idea that president drone and I killed Osama is a pacificst or anti-military is pretty ridiculous.

            He might be accurate to say that he doesn’t care for or about soldiers which is also true of a lot of belligerent military monsters throughout history.

            1. The idea that president drone and I killed Osama is a pacificst or anti-military is pretty ridiculous.

              He’s also the president who continued the use of the Bush era neologism ‘kinetic military action.’

              As far as I can tell, kinetic military action is a term so expansive that it encompasses every soldierly pursuit between a Navy Seal stubbing his toe and the nuclear extinction of the human race.

              No one who uses a euphemism like that in order to blunt the truth about war can possibly be anti-military.

      6. Just where did Big O “reinstate” benefits? The truth is, the dreaded rethuglikkkans have tried to deflect the worst effects of the alleged “shutdown”, but the Dems have insisted on penalizing everyone as a strategy to push more spending with zero accountability.

        Perfectly standard fare. Statists love to shut down the most visible and popular aspects of the government in hopes of raising more money for the completely unjustifiable parts. Budget cuts mean shutting down the police and fire departments, while bureaucrats carry on their mindless inspections. Someone might engage in a completely voluntary exchange, if the state isn’t there to “protect” them!

      7. The GOP ordered the Pentagon/DoD (whichever it was) to pay out the death benefits before the shutdown began. But because they used the wrong term, “death gratuity” the Pentagon/DoD didn’t make the payments and didn’t tell anybody about it until it got discovered. Obama knew about them for a couple days before he started spouting off rhetoric about it.

    2. I noticed someone tore down the shutdown closure notices at the nearby Corps of Engineers park when I was taking my dog for a walk there. It’s not our usual place but ever since it’s been closed, the dog really likes going there. And running without a leash on. And going through the “wildlife area”(*).

      (*)The “wildlife area” was and still is a big grassy field with picnic tables and horseshoe pits. It was designated as a wildlife area when ACE wanted to tear up another section of their project that was the previous wildlife area. It’s an utterly useless designation just so they don’t have a net loss of “nature” land. No dogs are allowed except during hunting season, which is undefined so it’s open year round, nor does it require the dog to be used for hunting or to have a hunting license in possession.

      1. Or, as our president would put it, Corpses of Engineers.

        1. They will be if we don’t end this SHUTDOWN!

          HOWZ DEY GONNA EAT?!?!

        2. The Corps of Engineers are civilians who don’t fit in with the private sector. They are d-bags.

  13. NY Times piece on the Charlie Foxtrot at healthcare.gov

    “These are not glitches,” said an insurance executive who has participated in many conference calls on the federal exchange. Like many people interviewed for this article, the executive spoke on the condition of anonymity, saying he did not wish to alienate the federal officials with whom he works. “The extent of the problems is pretty enormous. At the end of our calls, people say, ‘It’s awful, just awful.’ “

    They started working on the software in spring, and in September were still deciding on if you would need to login to browse the options.

    1. Megan McCardle called that the exchanges wouldn’t work like a year and a half ago. Her point was that the work on the exchanges wasn’t going to begin until early 2013, and it just didn’t seem possible that with all the work that needed to be done they’d be able to complete it in like 6 months.

      The fact that someone with no insider knowledge could call what the problem would be using nothing but a calendar does not speak well to all the politicians who thought this would work.

      1. Yup. The article makes a lot of good points of them delaying decisions for fear of Republicans getting an advantage from it. Like all the rules made after the election, and such.

        It’s pretty hilarious. The Republicans managed to ruin Obamacare not by any action, but just by being there. Administration was so afraid the Republicans would make political hay off of the failures of it, that they delayed things and made it inevitable it would fail. Hilarious.

        The thing is, though… after they cut out the interchanges with all the other government systems to determine eligibility and such, what was left is small enough that they should have been able to get it functional. Serving a few million users on day one is tricky, but it’s a solvable problem. There’s plenty of people who have built systems like that. It’s just a simple website, that needs a bit more architecture/big setup than most.

        Rather than build it to be able to serve as many people as it needed to, they built a line.

      2. Pauly Krugnuts on This Week today was incredulous at the claim that it would be hard to get the exchange to work properly because it just software which is apparently magical in some way.

        Actually gave insight into his worldview about government generally.

        1. ^^ This is hilarious.

  14. Politicians and the idiots who believe them never let facts or economic principles get in the way of a good narrative.

  15. SoCon Groups Describe Fall From Social Conservative American Paradise

    -With God ushered to the exit door of public
    policy, the dismantling of “morality laws” soon
    followed. The opportunity arose in 1965, when the
    Court addressed the constitutionality of “Comstock
    Laws” that had enjoyed a long history in the
    United States. In 1873, the U.S. Congress enacted
    the Comstock Act, which outlawed the “interstate
    mailing, shipment or importation of articles, drugs,
    medicines and printed materials of ‘obscenities,’
    which applied to anything used ‘for the prevention
    of conception.'” By 1920, according to one source,
    45 states had enacted laws to regulate “obscene” or
    “immoral” information. By 1960, 30 states explicitly
    outlawed the distribution of information or advertising
    about articles, instruments, and medicine
    concerning contraception, and 24 states explicitly
    banned the sale of such articles, instruments, or
    medicines.

    http://ncfpc.org/FNC/1109-SexualLibertySP,FN.pdf

    1. The Fall of SoCon American Paradise, continued

      -Amidst this political and legal backdrop, in 1961, Estelle Griswold, an Executive Director of Planned
      Parenthood in Connecticut, opened a Planned Parenthood clinic that provided contraceptives and contraceptive counseling to married couples. Griswold was arrested, prosecuted, and found guilty of violating Connecticut’s Comstock law. In turn, Griswold filed a lawsuit against the state challenging
      the law’s constitutionality. In 1965, the Supreme Court overturned the conviction and, in effect, nullified
      Connecticut’s Comstock law. Griswold served as a legal launch pad for an all-out assault on fundamental rights traditionally protected by the courts.

      -In effect, Griswold stole from
      the people the power of self-governance through representation and gave it to the courts. The courts could now overturn laws reflecting accepted morality under the guise of the “freedom” of the few.

      1. That’s not self-governance; that’s governance of OTHERS. If you believe artificial contraception is immoral, no one is holding a gun to your head to MAKE you use it. (‘kay, Obamacare does hold a gun to your head to make you pay for it. But I’m opposed to that, too, so no contradiction.) I’m just about positive no agency of the government is turning up in your bedroom to MAKE you wear a rubber or use birth-control pills or IUD’s.

        While I usually define myself as a Libertarian anarcho-capitalist, I do hold some views that could legitimately be described as “socially conservative”. The difference between me and the derided so-cons is that I legitimately believe in my principles, to the extent that I’m willing to let them stand or fall in the free marketplace of ideas, without State coercion.

    2. In 1873, the U.S. Congress enacted
      the Comstock Act, which outlawed the “interstate
      mailing, shipment or importation of articles, drugs,
      medicines and printed materials of ‘obscenities,’
      which applied to anything used ‘for the prevention
      of conception.'”

      Wow. It takes some serious balls to defend Anthony Comstock in 2013.

      1. One word (well, sort of): SoCons.

      2. From the leftist pov that we can’t just let society be managed by individuals doing their own thing, I don’t see how they are not all socons advocating against drug legalization, gambling (how much more irrational with ones own money can you get?) divorce legality, and the enforcement of heterosexual monogamy on all potential breeders. Of course, it is always about being not so far removed from the current cultural zeitgeist that you don’t become alienated from the reins of power with proglodytes.

  16. Richman should stick to stick to writing stuff like this. His foreign policy screeds are laughably bad compared to his domestic policy articles.

  17. I don’t think it’s so far-fetched that the repeal of Glass-Steagall was sold on its positive merits by those intent on immediately abusing it, but to accept it as a singular cause of the crash would amount to saying that correlation proves causation, which it most certainly does not. No, what really happened was that too many people trusted the advice and encouragement of incompetent government workers and crooked corporate types, a spectacular failure of consumer economics education for a generation that should have known better.

  18. For all the liberals who blame Glass-Steagall:

    I want to get in your car, slam on the gas, and smash it into a brick wall. Then, I’m going to get out and say, “You know what your problem is? The brakes on your car aren’t set to constant, maximum application. If that were so, I would never have been able to crash your car.”

    Then, I want to see said liberal go about setting his brakes up like that.

  19. It’s always freedoms fault.

  20. what Todd answered I am amazed that some people able to profit $9752 in four weeks on the computer. Visit Website
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  21. my roomate’s mother makes $82/hour on the internet. She has been without a job for 9 months but last month her check was $15166 just working on the internet for a few hours. look at this now
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  22. At least Christians don’t think they’re God, progressives really think they know how everyone ought to be.
    Comment on:

    http://www.nationalreview.com/…..h-goldberg

    “I’m curious, what part of “And let live” confuses your tiny, tiny brains?

    We stop polluters from putting toxins in the air, that stop us from living. We attempt to stop insane gun owners, who will gun us down in the street because the voices in their head tell them to. We stop you from throwing out the N word, because that is a vile word that dehumanizes others. We attempt to stop 25 million Americans from dying by giving them insurance through Obamacare.

    See, we only intervene because you are so stupid, that if we let you do what you wanted, you’d end up killing us all. We only intervene because people need to live, and you are dead set against that.”

    ?..

  23. There is a dude that clearly knows whats going on. WOw.

    http://www.AnonWonders.tk

  24. This is what I liked:

    “It takes Herculean ignorance or dishonesty to claim that America had free banking before 2010. Hence, this is a classic confirmation of my observation that no matter how much the government controls the economic system, any problem will be blamed on whatever small zone of freedom remains.”

    So true.

  25. Pointing out that Glass-Steagall wasn’t responsible for the housing crises is like say the 550 horsepower engine in a Porsche isn’t responsible for fast driving. While true, there is an obvious correlation. It’s important to consider that as the Obama mother ship hurls toward the end of the galaxy a force field must be bestowed around Hillary. Since G-S was repealed on her hubby’s watch it is increasingly important that any and all signs of Democrat involvement in the housing crises be attenuated at once. So for the millionth time, it wasn’t bad policy handed down from lawmakers that caused the devastation. It was the evil bankers. Government good. Markets baaaaad.

  26. This tale is favored by Sen. Elizabeth Warren and others of her ilk,

    Well, yes.

    Warren is a grade-A hack, if not also a grade-A idiot.

    Her work on bankruptcy is terrible.

    Her economics is pure reflexive populism.

    (I have a recollection of her at a Congressional hearing grilling an investment banker – can’t recall if it was from Bear Stearns or Goldman or whoever – about his company’s policy of issuing credit cards.

    The banker was politely confused … because investment banks don’t issue credit cards.

    And this woman wants to control regulation of finance?)

    (And contra GLK there are excellent real reasons to think that G-S had no particular effect on the housing crisis, unlike the way a super-powered Porsche is closely related to going 160mph.

    Sarcasm about Democratic infighting won’t make those reasons go away; want me to think G-S’s repeal caused anything? Tell me how, with concrete examples. Especially, compare diversified banks that wouldn’t have been possible under G-S with those that didn’t.

    Except that’s been done, and IIRC the diversified ones were healthier banks during the crisis.

    Glass-Steagal was effectively a dead letter when it was repealed ,as far as any half-sensible economist has been able to show me with examples rather than rhetoric.)

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