The capitalist West’s imperfect grasp of economic has shaken the pillars of dominance to their very foundations. Greed and the lure of bigger and fatter fees in the US sent the American lawmakers in 1999 to demolish the New Deal dam separating the reliable commercial banking practices from the unbridled risk derring do of investment banking.
And thereafter almost every ‘mature’ capitalist’ state joined in the rush for the high stakes, sparkling bottom lines, and sumptuous bonuses, to the delight of the plutocrats and the coupon clippers, through fancy, hardly understood computer generated, tricky financial instruments with exotic acronyms.
A mere nine years later, the devil came for his due, and the whole deck of painterly cards fell down, leaving the bill to the rate or taxpayers to foot the bill for a lackluster recovery. And to their shame and discredit, the mighty Wall Street and City and Parisian and Frankfurt banks kept rotten debts at full value on the books like people in the shadow of a plague hoping that they will be spared once the impending disaster would pass over with little damage. Wrong!
The reemergence of slipping into double digit recession has forced the Conservative government of David Cameron to propose something like Glass Steagall to treat the ailing British economy, in order to save him, his party, his bankers, and as a second thought the people of the British Isles from depression like conditions. He is calling for a ‘fire wall’ between commercial and risky investment banking, which, when you think about it, is a ‘conservative’ solution by preserving something that worked very well in the past from the aftermath of the Great Depression of the late 1920’s until the eve of the 21 century.
Of course the roar has come from the very sectors that stoked fierce the flames of the 2008 global recession: such a remedy will drive banks out of the UK to sunnier shores where they can continue sharp practices of their and garner fabulous sums as a reward. These wailers who moil and roil miss the point: given the extent and depth of the crisis, ultimately some version of Glass Steagall will prevail here, there, and elsewhere. So old darlings get used to tightening the belts around bloated waists!