During one of the recent Republican candidate debates, one of the candidates intimated that the legislation passed during the New Deal might not have been as beneficial for the country as we've come to believe. Of course I disagree with that sentiment, and one particular bit of legislation that came about in the New Deal era is in dire need of being reinstated (with 21st century updates): the Glass-Steagall Act (the Banking Act of 1933). Glass-Steagall was repealed with two new bits of legislation. The first was the Depository Institutions Deregulation and Monetary Control Act of 1980, and the second was the Federal Services Modernization Act of 1999, better known as the Gramm-Leach-Bliley Act.
I give Matt Taibbi credit for reminding me about the Glass-Steagall Act, as I read his blog post regarding the little situation with the UBS trader's $2 billion dollar bad deal. In the post Taibbi mentions the UK's consideration of "ring fencing," which is akin to what Glass-Steagall did in separating commercial and investment banks in the U.S, something that provided a great deal of stability for the U.S. economy for decades. It will be interesting to see if the UK does decide to implement "ring fencing," even in the face of calls of the possibility of an economic slowdown.
Taibbi's post also reminded me of why I was skeptical of potential effectiveness of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The one thing I liked about the law was the creation of the Bureau of Consumer Financial Protection, but I remained disappointed in the lack of actual teeth in the law, as I mentioned in a previous post. And all of this is an extension of my continued disappointment in the Obama administration's economic team, and the sense that it was more concerned about Wall Street (which now hates the President), than it was about Main Street.