The Glass-Steagall Cake

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Today is the tenth birthday of the legislation that repealed the Depression-era Glass-Steagall Act. Glass Steagall’s repeal allowed banks to combine investment banking and commercial banking operations—a move that many people believe contributed to the financial crisis by allowing banks to grow larger than ever before. If you’ve been paying attention, you know that a lot of the people who celebrated Glass-Steagall’s downfall are still running the economy today. But I didn’t know just how much they celebrated. Here, via Felix Salmon, is American Banker‘s contemporaneous account of the party, which reads like something straight out of the Cake Wrecks blog:

The reaction on Capitol Hill to passage of the financial reform bill last week ranged from revelry to morbid humor. To mark the historic occasion, House Banking Committee Chairman Jim Leach played host to a group of his closest collaborators on the bill, including Federal Reserve Board Chairman Alan Greenspan, Treasury Secretary Lawrence H. Summers, Comptroller of the Currency John D. Hawke Jr., Treasury Under Secretary Gary Gensler, and Rep. John J. LaFalce, D-N.Y. They joined staff members, lobbyists, and reporters in drinking champagne and devouring a large cake, which bore an epitaph for the Depression-era separation of commercial and investment banking that the bill undoes. It read: “Glass-Steagall, R.I.P., 1933-1999.”

Gary Gensler runs the Commodity Futures Trading Commission for the Obama administration. Larry Summers, of course, is Barack Obama’s top economic adviser. Save a piece of cake for us, guys. (As Felix notes, it would be a-mazing to find a photo of this party.)

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

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