A battle for bank reform spilled out onto the streets of Atlanta, as industry lobbyists hijacked the National Conference of State Legislatures this week.
Under heavy pressure from Wall Street interests, Delaware state Sen. Katherine Cloutier on Tuesday withdrew a convention resolution that called for reinstating the Glass-Steagall banking law.
The next day, Glass-Steagall supporters counterattacked, leafleting delegates and lobbyists boarding buses at the convention site. Police were summoned to remove the activists from the public sidewalks – but that effort failed.
During Thursday’s plenary session, Maine state Rep. Andrea Boland led a group of lawmakers in introducing a Glass-Steagall amendment to a resolution on the impact of federal deficits.
The chairwoman of the session declared that the amendment was “not germane,” which triggered a heated floor debate among the 500 delegates. A roll-call vote ended with 33 states backing the chair, 11 states supporting the amendment and four states abstaining.
LaRouche PAC, which advocates for restoring Glass-Steagall, said in a statement that the Atlanta debates “had set the basis for the issue being revisited at follow-up meetings.”
“We had intense discussions about the reality of the economic collapse … and got detailed feedback on the hooligan campaign being run by the Wall Street gang. It was pure thuggery. The only line that the bankers could spew was that Glass-Steagall is a strictly LaRouche operation,” said the group headed by former presidential candidate Lyndon LaRouche.
In fact, Glass-Steagall is gaining support right and left. Big-name backers range from conservative columnist George Will to FDIC vice chairman Tom Hoenig, an appointee of President Barack Obama.
Four state legislatures have passed Glass-Steagall resolutions to restore the 1933 law, which protected Main Street commercial bank deposits from risky Wall Street investment-house speculation. Within nine years of Glass-Steagall’s repeal in 1999, Wall Street went bust and “Too Big To Fail” banks received more than $700 billion in taxpayer bailouts.
Three Glass-Steagall bills are pending on Capitol Hill, with more than 70 co-sponsors.
Amid the battle in Atlanta, The New York Times editorialized for tougher banking laws.
“Municipal officials are prey for Wall Street,” the Times opined. “The Dodd-Frank financial reform law called on regulators to establish ‘enhanced protection’ for municipalities and other clients in their dealings with Wall Street, but the Securities and Exchange Commission has not yet completed rules, while the Commodity Futures Trading Commission’s rules are so weak as to virtually invite the banks to exploit municipalities.”
Former Michigan state representative and current Detroit School Board chairman LaMar Lemmons said Wall Street bankers are imposing impossible conditions on his city, which is in the throes of bankruptcy.
"Unless you re-erect Glass-Steagall and stop the bleeding, our pensioners have now been made vulnerable," he said.
More broadly, critics contend that the current global financial regime forces domestic austerity programs that bankroll perpetual wars.
“Glass-Steagall is, ultimately, the only secure war-avoidance program,” Jeffrey Steinberg writes in Executive Intelligence Review.
“Until and unless Wall Street and the Anglo-Dutch system they represent are bankrupted altogether, the world is not safe from their drive for mass genocidal population reduction,” Steinberg said.