Absolute Power Corrupts Absolutely

People who have a sophisticated world view understand that the forces that control the day to day operations of the world, are not readily discernable. As citizens in a democratic society we understand a great deal about the political process by which changes get made. What we do not truly understand, is how there are forces and powers that exercise a great deal of control over the entire political system. Or perhaps, those of us who realize that the actions of the government particularly in their role of taxation and commercial and trade regulations are able to effect what may collectively be called Big Business in a great way

The most perfect example of this is the current state of affairs with regard to United States economy. 

In the autumn of 1929, a frenzied decade of stock speculation came to a dramatic conclusion when companies on the New York Stock Exchange lost roughly 40 percent of their value in a two-month period. At the time, only two percent of Americans held equity positions in public companies.

So why did the banks collapse?

Because the mostly unregulated American banks used their uninsured deposits on equity bets in the stock market. When share prices collapsed, the savings of depositors evaporated. By 1932, one-fourth of American banks no longer existed, and nine million Americans had lost every dime. During the Great Depression, national unemployment reached 26 percent.

Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.

The certain result of repeal of Glass-Steagall will be a wave of mergers surpassing even the colossal combinations of the past several years. The Wall Street Journal wrote, "With the stroke of the president's pen, investment firms like Merrill Lynch & Co. and banks like Bank of America Corp., are expected to be on the prowl for acquisitions.

Now before we ask the loaded question of, Why was this done? Let's first make sure we understand, what was done:

What this law did was break the figurative wall between banks, brokers, insurance companies and other financial services companies. The Glass Steagall Act, among many things, separated all sorts of financial services and placed careful limits on what sorts of financial services anyone company can perform.

The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation.[citation needed] Some provisions such as Regulation Q that allowed the Federal Reserve to regulate interest rates in savings accounts were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980.

Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999

Searches related to deregulation of banks
deregulation of banks wiki
deregulation of banks reagan
financial services modernization act of 1999
deregulation of banks history
deregulation of banks bush
deregulation of financial markets
phil gramm deregulation of banks
ronald reagan deregulation of banks