British Calls for Glass-Steagall Invoke FDR
July 8, 2012 • 11:54AM

Two of the many more calls for Glass-Steagall emanating from Britain in the aftermath of the Barclays LIBOR scandal, invoke the model of Franklin Roosevelt, underscoring Lyndon LaRouche's contention that the endorsement of Glass-Steagall by the British financial elites is a message intended for him personally. In the first, Oxford physics Prof. Gerald Elliott, in a letter to the editor published in the Independent, suggests that Labour Party leader Ed Miliband announce that, as prime minister, he would at once bring in a British version of the Glass-Steagall Act. "When I lived in and worked in the U.S. in the 1960s, I could forget about runs on the bank, because the 1933 Roosevelt legislation ensured that the local bank where my salary resided could not speculate with my dollars," Elliott writes. "It also ensured that my local bank would have funds available to offer me a mortgage; it also had funds to support local industry." He notes that the bankers would not enjoy these restrictions on their "freedoms," and that Miliband would have to admit that Gordon Brown may have gotten it wrong, but "The prestige of Roosevelt is palpable and the history of the 70-plus years of financial stability after the Depression is compelling."

Equally interesting is the Daily Mail's Dominick Sandbrook's call for Glass-Steagall. Though couched in Tory nostalgia for the old Empire, he also invokes FDR as a "good model" to follow. "When he became U.S. President in 1933, the economy was in ruins and there seemed a genuine chance that an anti-capitalist demagogue might capture the imagination of the American people.

"Roosevelt's historic contribution was to rekindle ordinary people's faith in capitalism. As soon as he took office, he passed the Glass-Steagall Banking Act, limiting excessive bank speculation and effectively insuring most people's bank deposits. A year later, he set up the Securities and Exchange Commission (SEC) to end the culture of corporate abuses in the stock market.

"Not surprisingly, there were howls of outrage from Wall Street. But in the following decades, many of its excesses having been eliminated, Western capitalism boomed, allowing ordinary Americans to enjoy the new comforts of an affluent society."

Liam Halligan, in a July 7 column in the Daily Telegraph, doesn't invoke FDR, but does note that "Finally, a head of steam is building" for a proper division between investment and commercial banking, and proceeds to list the names of prominent bankers and economists who have joined the call for the Glass-Steagall reform of British banking. Among them are former Citigroup chairman John Reed; former Labour City Minister Lord Myners; Professor John Kay, "one of the U.K.'s few world-class academic economists, backs Glass-Steagall;" as does Terry Smith, "a City businessman with a well-deserved reputation for being proved right on the big financial issues"; and the late Sir Brian Pitman, "one of the legends of U.K. retail banking, used his last ever newspaper interview ... to make the case for Glass-Steagall."

Finally, Financial Times columnist Matthew Vincent, in a column posted on July 6, caustically takes down the investment bankers' arguments against Glass-Steagall. "'We will be less able to compete.' Good—competition has done nothing for customers. 'It will damage London as a financial center.' No, it won't—it will just make houses more affordable. 'We won't be able to attract the talent.' I'm sure you will, if you hang around the gates of Ford Open Prison long enough." Ford Open Prison, Wikipedia tells us, is notorious for easy escapes of violent criminals.