Glass-Steagall Organizing in Depth
June 13, 2012 • 7:56AM

The Glass-Steagall round-up for today shows the continued impact of LPAC candidates and general organizing on the Glass-Steagall principle, along with other "institutional" moves.

* One of two Democratic primary challengers to incumbent Massachusetts "Barney Frank-wannabe" Congressman Richard Neal (D-Springfield) is (Mr.) Andrea "Andy" Nuciforo, a former state senator and now the Berkshire Middle District registrar of deeds, who has brought G-S into the campaign, and is challenging Neal on his "social" credentials. While there is nothing on Nuciforo's website about G-S, his organizing on the issue was pointed out in an article today on MassLive.com.

While Neal [who has steadfastly refused to endorse HR 1489 — ed] campaigns as a "man of the people," purporting to defend Social Security and other safety net elements, the paper points out that "[primary challenger Andy] Nuciforo has criticized Neal's economic policy, focusing on his support for a handful of bills deregulating the financial industry, which Nuciforo said contributed to the current economic crisis. The Nuciforo campaign points to a 1994 bill repealing restrictions on banks expanding from one state to another; a 1999 law repealing the Glass—Steagall Act — which had separated the activities of commercial and investment banks; a 2000 law allowing for the expansion of derivative trading; and a 1998 act limiting the ability of private investors to sue for securities fraud.

"The Nuciforo campaign ties those votes to donations Neal has gotten from the financial industry. According to the Center for Responsive Politics, the top industry contributing to Neal throughout his career has been the insurance industry ($1.2 million), followed by securities and investments ($555,000)..."

* LPAC contact Dan Schmidt, head of the Iowa American Agricultural Movement, writes a letter to the editor of the Marshalltown TimesRepublican, titled "Fighting for our Republic": "...Now Lyndon LaRouche is bringing it all back so that we can once again have the government [republic] we were meant to have. First, however, we must recreate the Glass-Steagall Law that will separate the good banks from the toxic debt banks. This was never 'we the people's debt.' Great people died to save our republic. Before Lincoln was shot, he issued the Greenbacks, a form of congressional credit system.

"After that, no president had the guts to fight for our country's republic until Franklin Roosevelt again used the credit system to bring our country out of the 1930s depression. He used the credit system to pay for the WPA and the Tennessee Valley Authority. This put a lot of people to work and created a water system and created electricity that brought power to family farms, making production much easier..."

* Reuters blog by David Cay Johnston on "JPMorgan's $2 billion experiment with truthiness:" "Too Big To Fail banks like JPMorgan enjoy an implicit federal guarantee in the event a manageable $2 billion loss becomes an unmanageable $20 billion loss. These banks have also delayed implementation of the Volcker rule, which bars some speculative trades, and other provisions of the Dodd-Frank law as they work to make it more loophole than law. Most disturbing is Wall Street's success in blocking any move to restore Glass-Steagall, which required commercial banks to take deposits and make loans, not speculate like JPMorgan did. With Glass-Steagall restored we would not be talking about bailing out banks that speculate."

This is the first time Johnston, who writes anti-Wall St. blogs, has addressed G-S.

* "Portfolio manager" John Hussman addresses the stagnant economy and Congressional debate over budget/taxes in his June 11 weekly newsletter: "Lost in this debate is any recognition of the problem that lies at the heart of the matter: a warped financial system, both in the U.S. and globally, that directs scarce capital to speculative and unproductive uses, and refuses to restructure debt once that debt has gone bad... Once we abandoned Glass-Steagall, removing the firewall between traditional banking and more speculative activities, and allowing those activities to have the effective protection of the U.S. government, it was only a matter of time until a credit crisis would unfold...

Unless we want a world where public services are cut to the bone in order to make bank bondholders whole, and where recession (or in some countries depression) is forced onto citizens in order to make government bondholders whole, the world's leaders will eventually have to wake up and recognize that bad debt requires bondholders who willingly took the risk to also take the loss."