I asked this question of Josh Romney (Mitt Romney’s son) when he spoke at our tea party meeting last year. He promised to send me an answer but I have not received one. I have asked this question of the Romney Campaign headquarters and the Arizona Republican Party headquarters. None of them will even dignify my request with an answer. So I am asking the public. Maybe someone will know the answer. What is candidate Romney’s position on restoring the Glass-Steagall Act?
After the Great Depression, this Act was passed to ensure a stable banking system by separating investment banking from savings/commercial banking. It worked fine until people like Barney Frank, Chris Dodd and Charlie Wrangle got it repealed. They needed to do this to pass legislation that would enable the same type of banking mismanagement and risk-taking that led to the Great Depression. Their social engineering was done in the name of making home ownership available to everyone, whether they could afford it or not. To do this they had to enable banks to get in the securities business. Thanks to Frank and Dodd, banks could and did, securitize home loans made to people that couldn’t afford them. Banks passed on the risky loans as though the mortgages were secure loans. However, the only real security behind the economically incapable borrowers was the tax payer.
Obama has gone on and on for four years about the need for bigger government and more regulations and he has implemented many. But he never mentions the one simple piece of legislation that has been proven to work — the Glass-Steagall Act — much less saying he will sign it. His history makes it clear that he will not sign legislation that would actually curtail the wild securities activities of his biggest campaign contributors — Wall Street.
We recently witnessed the $2 billion loss by JPMorgan Chase via its bets on derivatives to “hedge” its other risky securities bets. Granted, in this case, it was supposedly their money they lost (unless we have another Corzine moment), but as Obama has made clear, he has and will use our money to bail them out.
If banks that are funded and backed with customer deposits and making commercial loans were limited to banking and kept out of the securities markets, our financial markets, including mortgages, would be well-served.
Will Mitt Romney support and push for reinstating the 37 page Glass-Steagall Act? Of course it’s harder to hide political malfeasance and earmarks in a 37 page bill than in bills with 2,700 pages.
If anyone knows, please let us know. Thank you.