Banking exec who helped bring down Glass-Steagall Act – “Oops, my bad.”

For anyone who missed it, Bill Moyers has been using his new show Moyers and Company to delve deep into the most important issue of our lifetimes – that is, the ever growing income gap between the wealthiest 1% of Americans and the rest of us. This week, he had on former Citigroup Chairman John Reed, who was instrumental in the dismantling of the Glass-Steagall act, which many believe helped facilitate the recent economic collapse.

Listening to the interview helped shed light on this hilarious timeline:

  • 1929 – Stock market crashes and plunges America into Great Depression
  • 1933 – Glass-Steagall Act signed into law with the goal being, as Moyers put it, to “prevent investment banks from ever again gambling with people’s life savings, as they had before the market crash of 1929.”
  • Fast forward to 1999 – John Reed decides he wants to resurrect the boom times of the roaring 20’s and merge his commercial bank Citicorp with investment bank Travelers Group (a blatant violation of Glass-Steagall).
  • Reed goes ahead with illegal merger after securing promises from Washington friends that Glass-Steagall would be repealed after the fact.
  • Glass-Steagall is repealed, and banks immediately resume gambling with the people’s life savings.
  • Within a few years, U.S. economy is decimated once again by the worst financial crisis since – wait for it – the Great Depression.

The whole interview was surreal. Reed does a masterful job at feigning ignorance (Who would of guessed we (Wall Street) would end up exploiting this new opportunity to enrich ourselves at the risk of plunging the nation and possibly the world into another Great Depression!? Not me!). In fact, Reed’s response can be summed up as follows:

“Look, we got carried away. Yeah we got rich, but come on! Enriching ourselves was never a factor in trying to dismantle Glass-Steagall! Yeah, I feel bad for all those people who lost their jobs and so forth and so on. Anyway, I guess we all learned Glass-Steagall was a pretty useful law after all. We should probably put it back now.

Watch it.

It was the half-hearted mea culpa of a man who, along with his other millionaire cohorts, have long since reaped the rewards and dodged the consequences of their disastrous meddling with our financial regulations. Wall Street firms made their billions, ordinary Americans were wiped out in the resulting economic collapse, and ordinary American taxpayer dollars were funneled back into those same Wall Street firms in order to protect them from being wiped out too. To all of that, Reed simply responds “I feel bad about it.” Cold comfort for the rest of us who are unemployed, bankrupt, underwater on our mortgages, etc, etc.

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