One of our most popular articles discusses repeal of Glass Steagall. Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations. He also explains why our article was so popular:
If any three people are most responsible for the failure of financial regulation, they are Greenspan, Larry Summers, and my former colleague, Bob Rubin. In 1999, they advised Congress to repeal the Glass-Steagall Act, which since 1933 had separated commercial from investment banking.
By 1999, Wall Street was salivating over such a repeal because it wanted to create financial supermarkets that could use commercial deposits to place bets in the financial casino. That would yield the Street trillions.
At the same time, Greenspan, Summers, and Rubin also quashed the efforts of the Commodity Futures Trading Corporation to regulate derivatives when its director began to worry that derivative trading already was getting out of control.