The Glass-Steagall Cake

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Today is the tenth birthday of the legislation that repealed the Depression-era Glass-Steagall Act.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.)

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate