Reich Gets Obama's Answer: No Glass-Steagall (and No Healthcare)
October 26, 2012 • 7:20PM

News Minute: Obama Attacks Glass-Steagall

President Barack Obama opposed restoring the Glass-Steagall Act in a interview with Rolling Stone magazine posted Oct. 25. NerObama brought up his rejection of Glass-Steagall without being specifically asked about it, in a question and answer concerning the Dodd-Frank Act which he got Congress to pass instead of restoring Glass-Steagall. After a defense of Dodd-Frank and supposed mortgage reforms, Obama said: "I've looked at some of Rolling Stone's articles that say, 'This didn't go far enough, we didn't institute Glass-Steagall' and so forth; and I pushed my economic team very hard on some of those questions.[!] But there is not evidence that having Glass-Steagall in place would somehow change the dynamic. Lehman Brothers wasn't a commercial bank, it was an investment bank. AIG wasn't an FDIC-insured bank, it was an insurance institution. So the problem in today's financial sector can't be solved by re-imposing models that were created in the 1930s."

This is exactly the way Treasury Secretary Tim Geithner dismisses Glass-Steagall, but Obama has not been reported doing this publically before now. Interviewer Matt Taibbi then posted a full debunking of Obama's phony argument against Glass-Steagall. Obama opposed restoring Glass-Steagall just days after former Labor Secretary Robert Reich challenged him, in a column entitled, "President Obama should call out Romney by restoring Glass-Steagall."

NerObama's thumbs-down on Glass-Steagall also follows immediately on the Oct. 24 release of his "secret" interview with the Des Moines register, where he bluntly discussed his determination to cut Medicare and Medicaid immediately after re-election. Saying "There will be no sequester," Obama actually praised it: "In the short term, the good news is that there's going to be a forcing mechanism to deal with what is the central ideological argument in Washington right now, and that is: How much government do we have and how do we pay for it?" Obama said. "So when you combine the Bush tax cuts expiring, the sequester in place, the commitment of both myself and my opponent — we are going to solve that big piece of business." He continued that this would be done by cutting Medicare and Medicaid. "It won't be pleasant [but] "I'm willing to cut more, and I'm willing to work with Democrats and Republicans when it comes to making some adjustments that bring down the cost of our healthcare programs, which obviously are the biggest drivers of our deficit."