- Mar 28, 2010
- Reaction score
- Political Leaning
so... how did we get into this mess?The system malfunctioned because the human beings who ran it were greedy and saw a way to enrich themselves. That means that the recession from which we are still reeling was primarily a result of human nature, which the latest reforms don't begin to address.
the Roosevelt administration rammed through Congress the Glass-Steagall Act. The main provision of the law separated commercial banks, like the one where you are likely to do your checking and savings, from investment banks, like the ones that deal in high finance. The idea was to protect highly regulated commercial banks from the vicissitudes and risks of the much less regulated investment banking industry, which was charged with having wrecked the economy.
The general verdict is that Glass-Steagall worked. Until its repeal in 1999, when President Clinton caved to pressures from Republicans ...
Neal Gabler - Los Angeles TimesIn 1981, the government decided to reward greed. ..In effect, the Reagan tax cuts, which were hailed by conservatives as a way to unleash American initiative, also unleashed American avarice.
During the long postwar economic boom, the top marginal rates hovered at 91%, removing a lot of the incentive to game the financial system. There was no point in scheming if you couldn't profit from it. Still, the country prospered. So did Wall Street.
Then came the greed deluge. ...when President Reagan cut the top marginal tax rate drastically from 70% to 50% in 1981 and then to 28% in 1988...some of the worst aspects of human nature and led to some of the worst excesses. It was just a matter of time before Wall Street went wild.
and... around we go again. Somehow, though, the average Joe does not seemed to have learned much. support for the sort of measures that Roosevelt enacted is slight while everyone wants to re-elect Ronnie.
no one ever went broke betting on the stupidity of voters, but some got pretty rich on it.