Glass-Steagall

2008,
,

, 1930. ,
,
, -
. ,
,
, laissez-faire ,
. ,
,
. ,
,
,
.
, ,
, 1980,
- .
,
Ronald Reagan1
Margaret Thatcher2, .
1

1981, Reagan :
, (Government is
not the solution to our problems, government is our problem). ,
IBM.
(depository institutions
deregulation and monetary control). regulation Q
( ) .
2
, 1975 1990
1979 1990,
-. ,
manifesto . ,

 laissez-faire
. ,
, ,

. ,
,

(futures & options exchanges) .
Greenspan, ,
Reagan,

3, :
, o Reagan
Adam Smith4. , o Reagan ,
,
. , ,

, ,
.
, Wall Street,
1987, Dow Jones
, 19 , 508 , 22.8% ,

24 ,
.

,
.
3
George Goodman ( Money Game, Adam Smith,
Institutional Investor), The Roaring 80s, p.26, 1988.
4
Alan Greenspan, The Age of Turbulence, p.86-89, Penguin, 2007.

 ,
.
,

,

.

:
,
,

.5 40 , Ronald Reagan.


, , ,
.
,
Reagan-Thatcher ,

. ,

,
(casino capitalism).
, Keynes,
,
, .

President Reagans State of the Union Address, 1987. The calendar cant measure America
because we were meant to be an endless experiment in freedom, with no limit to our reacheswhat I want
to see above all is that this remains a country where someone can always get rich. , Lewis Lapman,
Money and Class in America, p.8, New York, 1989.

 , Thatcher
(consensus).
: :
, 6.
,
7-11
. ,
, (poll
tax). , ,
,

(distributive

justice)

. ,
:
, .
, ,
.7
, , ,
Glass-Steagall
, ill Clinton. ,
1999,
.

,
(securitization) .
,
(garden
variety) .
,
1929, ,
6

Margaret Thatcher, Quotes. : There is no such thing as society: there are

individuals, men and women http://thinkexist.com
7
, , , 1131, , , 1993, .

 Glass-Steagall .
,

,
. ,

, .
,

, ,

, .
Glass-Steagall8 1933 (Banking
Act of 1933) Franklin Delano Roosevelt (FDR)
(Great Depression).
Carter Glass (Virginia) Henry Steagall (Alabama),
,
(Federal Deposit Insurance Corporation- FDIC).
1933, (New Deal) Roosevelt
(1933-1945),

Dow Jones 90%
( 1932) .9

Glass-Steagall ,
Carter Glass, ,
Henry Steagall,
. Glass-Steagall 1932
Henry Hoover, Glass-Steagall
1933, Franklin D. Roosevelt.
(),
Federal Reserve
. , - (re-discounting)

. ,
, 1931
. Glass-Steagall,
,
.
9
1929 1933,
Encyclopedia Britannica, 11.000 25.000

 ,
Glass-Steagall .
, 1931 1932, 3,600
. ,
.

, laissez-faire
,
(social security)
. , ,
.
, o
, (fiat money)
,
. ,
, , ,
.
1929,
1929. , 1931-1932,
3.600 (H. Barger, Money, Banking and Public Policy,
Columbia University, p.546, Rand McNally, 1962).
1933 4.000 . T. Watkins,
, The Great Depression in America in 1930s (Little Brown, 1993)
4.004 1933 Roosevelt 4 1933.


1929-1933.
(suspensions)
. ,
.
:
Number of Banks and Bank Suspensions

1929
24.633
659
1930
22.773
1350
1931
19.970
2293
1932
18.397
1453
1933
15.015
4000
1934
16.096
57
: Historical Statistics of the United States: Colonial Times to 1970, Table V 20-30.

346 10, ,
.
,
.

.
1929, Dow Jones (3
)
margin calls,
24 1929, Black Friday.
, , ,
(get rich quick) .
1920,
,
, ,
.
, ,
. ,
, ,
,
, -
(joint accounts), .
,
, 79 , 24
2008,
. ,
Dow Jones, Greenspan :

10

Federal Reserve Bulletin, 1929, The Great Crash, J.K. Galbraith, p.197.

 ,
11.
,
,
.
,
,
(lender of last resort)
. 1929,
, , ,
Federal Reserve laissez-faire.
, ,

, , (liquidate),
, a la
Schumpeter.
,

Schumpeter, (Creative Destruction),

. , ,

, ,
,
. ,

. , 2008, ( Chief
Executive Officers ) ,
, ,
, ,

11

Greenspan
(Senate Committee on Banking and Finance).
: I have found a flaw in my thinking. I am in a state of shocked disbelief; the whole intellectual
edifice of modern risk management broke down.

 . , , Alan Greenspan,
.
, Schumpeter,
,

,
.
(perennial gale)

, .
,
,
,
:
.12
,
,
,
, :



7%, ,
3%.

.13

, ,
, par excellence ,
12

Joseph Schumpeter, Capitalism, Socialism and Democracy ( 1942), Harper, Third edition, 1975, New York.
:This process of Creative Destruction is the essential fact about capitalism. P.83.
13
Carter Glass
1929, Carter Glass and the Banking Act 1933 (Glass-Steagall Act),
http://www.sempiuspublications.com . : Member banks of the system have
manipulated their deposit accounts so as to transfer funds from the demand deposit account, requiring a
reserve of 7%, to the time deposit account, requiring a reserve of only 3%, thereby releasing enormous
funds to be thrown into the maelstrom of stock speculation.

 .
,
,
. ,
,
,
. , ,
Adam Smith overtrading,
,
.
,
2008, .
,
,
(Great Depression) 1930,
.
Hoover
1932. Roosevelt
, .

1932.
,
.
, ,
, -
.

,

Roosevelt 4 1933,
4.000 , 30
. ,
10

Roosevelt, ,
,
(moratorium)14.
, 13.000.000
, Franklin Roosevelt

:
Practices of the unscrupulous money changers stand indicted in the court of
public opinion, rejected by the hearts and minds of men. They have no vision,
and where there is no vision the people perish.15
First Inaugural Address

, 4 1933, Roosevelt

, Bank Holiday.
, Carter Glass,
, Roosevelt
40%
. , stop-loss
,
FDR stop-loss
. , ,

.
, 6 1933,
,
, Wall Street,
.
14

, ,
, .
15
Roosevelt 4 1933.
:
, .
.

11


.
, (Emergency Banking
Act), 9
.16
,
4
1933. ,


. ,

. ,
(
) ,

(Federal Reserve Bank)

(par
value). ,

de facto 100% .
,
13 1933, ,

.

, 50%

16

Emergency Banking Act, http://en.wikipedia.org./wiki. 9 1933,

100
Roosevelt 1932,

.
.

12

Wall Street. , 15 1933,

,
.
, (in
hindsight) Roosevelt,
, .
, , ,
.
1933 1.081 ,
57
(1934),
. ,

.
,
Roosevelt
. ,
Glass-Steagall (16 1933),
New Deal

. , GlassSteagall
1929 :
19 20
. ,
29

1920.


.

13


Glass-Steagall Act.17
, Glass-Steagall
: ()
() . ,
,

,
. ,
,

.
, ,

. ,

.
, Q (Regulation Q) Glass-Steagall
Federal Reserve

(shark loaning).
,
100
Roosevelt, ,
, 66
. Bill Clinton 12 1999 GrammLeach-Briley . ,
17

:
(http://digital.library.unt.edu/govdocs/crs/permalink/meta-crs-9065:1). T : In
the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable.
Then, in the Great Depression after 1929, Congress examined the mixing of the commercial and
investment banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and
fraud in some banking institutions securities activities. A formidable barrier to the mixing of these
activities was then set up by the Glass-Steagall Act.

14

 (The Financial Services

Modernization Act of 1999),
. , de facto
Glass-Steagall,
, ,

.
Gramm-Leach-Briley
(mergers & acquisitions), ,
, .
, conglomerate,



.

De la Vega Confusion des
Confusiones18 Amsterdam 17 .

18

Joseph de la Vega, Confusion des Confusiones, Amsterdam, 1688.

1996 Wiley
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds.
,
. de la Vega
,
Amsterdam 1680.
traders
options (futures) de la Vega
, Amsterdam
(gambling hell). , 50
(bizarre)
. (get rich quick)
(1636),
Viceroy-
. ,

,http://spiros26.wordpress.com,
, 2007, .

15

Gramm-Leach-Briley

.
, ,
coup de
grace . ,
1998, Citicorp
Travelers Group , Citigroup
140 . ,
,
- (co-chairmanship) -
.19
,
, ,
Citigroup. , Bill Clinton, ,
(modernization).

:
[]20. ,
19

1988, Citicorp , Citibank, Primerica,

Smith Barney, Travelers Group, a conglomerate
, Shearson
Lehman, Salomon Brothers, .. GlassSteagall , (loopholes) .
,
Citigroup. o
1999, Clinton, Robert Rubin
Citigroup,
at large -. , Rubin
Gramm-Leach-Briley ( 1999)
Larry summers,
Obama. Rubin,
Citigroup, 2008,
, C, Big Board, 98% $56 2007 $0.90 cents 2009.
, ,
Obama Citigroup (36%) $3
2009. , ,
zombie .
20
, , , 1129, .12, , 1993. :
.

16


,
, .
, Clinton


.
21. , ,

.
. ( ),
. ,

.22 ,

, ,
.
Clinton,
.
Clinton
,23
21

Ibid, . 14. :
, .
22
Ibid, 1129b, . 16. :
[ ]
.
23
Citigroup 1998 (8 ), 13
Glass-Steagall. Greenspan (ibid,
p.199) 14 1999, Summers
Federal Reserve
Gramm-Leach-Briley.

14 1999, . ,
: .
. Greenspan Summers
,
2000, .

17


, .
42
,
(impeachment).
, ,
. , Greenspan
Clinton Lewinsky :
Monica Lewinsky

. .
,
.24

Greenspan

GlassSteagall,
:
25.
:

26. ,
,

FIRE (Financial, Insurance, Real Estate),

.
$250-$400 ,
. Nobel Joseph Stiglitz
$300 Phil-Gramm,
(The Economic Crisis: Capitalist Fools, Vanity Fair, January
2009). , Phil Gramm (Texas)
- (co-chairman) UBS
2008, .
24
Alan Greenspan, ibid, p.187.
25
Ibid, p.199. : I agreed that liberalization in these markets was long
overdue.
26
Ibid, p.199. : Historians view the Financial Services Modernization Act as a
milestone in business legislation.

18


.
Gramm-Leach-Briley

.
, ultra
;
, , libertarian

;
Adam Smith; ,
(odd couple) Clinton-Greenspan ,

Wall Street.
Wall Street, Clinton
Robert Rubin, - Goldman Sachs,
. Rubin

. ,

Clinton $700

(Social security) .

,
.27
Greenspan Wall Street
.
.
27

Ibid, p.218.

19



Wall Street. ,
irrational exuberance28 ( ),
Wall Street o 1996, ,
. ,
.
,
1996 1999 2000. ,
,
,

Greenspan

Wall Street.29
, ,
Greenspan
.

, , .
, ,
(savage society),
, ,
.
, conglomerate

(too big to fail). ,
, ,
.30
,
Clinton
28

Ibid, p.176. : The concept of irrational exuberance came to me in the

bathtub one morning as I was writing my speech.
29
Ibid, p.372. : Why do we wish to inhibit the pollinating bees of Wall Street?
30
The survival of the fittest vs. the survival of the biggest.

20


. ,
2009, Clinton
Glass-Steagall . John Reed,
Citicorp -
Citigroup, (monster),
, Glass-Steagall.
Paul Volker, Greenspan Federal Reserve,
Obama, ,
, Glass-Steagall.
Greenspan.

Adam Smith . , 60
, magnum opus
,

- . ,

libertarian, Adam Smith

,

.

,
Robbers Barons 19 .
Adam Smith,
.
Adam Smith,

:


.
21

 ,
, ,
, ,
.31
, Greenspan
, ,
, , , .
Adam Smith
,
,
.32 , ,
,
33
Glass Steagall,

.
, Adam Smith
,
.
(natural price)
:
. Smith :
, ,
, ,
31

Adam Smith, Wealth of Nations, ibid, p.164. : A monopoly granted either to

an individual or to a trading company has the same effect as a secret in trade or manufactures. The
monopolists, by keeping the market constantly under-stocked, by never fully supplying the effectual
demand, sell their commodities much above the natural price, and raise their emoluments, whether they
consist in wages or profit, greatly above their natural rate.
32
Alan Greenspan, ibid, p.261. : The Wealth of Nations, is one of the great
achievements in intellectual history.
33
Greenspan 1997 CFTC (Commodities Futures
Trading Commission) Brooksley Born
OTC . 1999, Greenspan,
. , SEC (Securities Exchange
Commission) Arthur Levitt , , Rubin Greenspan,
.

.

22


,

, .34
Greenspan ,

;

, Reagan ,
,
. , ,
, , ,
, , .

, ,
. , Greenspan,

,
. , ,

Adam Smith.
, Greenspan 0
. ,

, ,
-. ,
34

Adam Smith, ibid, p.164, 251. : The exclusive privileges of corporations,

statutes of apprenticeship, and all those laws which restrain, in particular employments, the competition
to a smaller number than might otherwise go into them, have the same tendency keep up the market
price of particular commodities above the natural price. Monopoly, besides, is a great enemy of good
management.

23


. , -
:

; ,
: , .35
, maestro
(risk management) ,
hedge funds
: hedge funds
(counterparty surveillance).36
Paul Krugman,
Nobel 2009,
.
, 19992000, Bush.
,

Greenspan. ,

, .
, Libertarian
, (confiscation)
. ,

. George Bush.
Paul Krugman New York Times,

35

Alan Greenspan, ibid, p.367, 369. : Indeed how can anyone be sure that the
unregulated global system will work? Yet it does, day in and day out The market place itself regulates
hedge funds today through what is known as counterparty surveillance.
36
Alan Greenspan, ibid., p.370. : The market itself regulates hedge funds today
through whats known as counterparty surveillance.

24

 Federal Reserve,
, .37
Greenspan, ,
,

. ,
,

. ,
Greenspan

38.
, (287.- 212.) ,
,
. ,
, , ,
.
(Integral Calculus) 2000 Newton Leibnitz.
,
, ,
, !, !
,
:

. ,

37

Paul Krugman, The Three Card Maestro, New York Times, February 18, 2005.
: By repeatedly shilling for whatever the Bush administration wants he has betrayed the trust placed
in Fed chairmen, he deserves to be treated as another partisan hack.
38
Alan Greenspan, Ibid, p.176. :To this day the bathtub is where I get many of
my best ideasImmersed in my bath, Im as happy as Archimedes as I contemplate the world.

25

39

. ,
Greenspan .
;
,

,
.
, Keynes
:

.40 ,
,

,
.41 Adam Smith,
laissez-faire
,

, .42

30 2010
. 210-8073833

39

, . :
,
, , , http://
www.micros apoplous.gr/anc.texts-plut.html
40
J.M.Keynes, A Tract on Monetary Reform, London, 1923, Reprint, 2008, BN Publishing, p.x One is
often warned that a scientific treatment of currency questions is impossible because the banking world
is intellectually incapable of understanding its own problems.
41
Ibid., p.x.
42
Adam Smith, The Wealth of Nations, Penguin Classics, 1986, p.399. : But
every particular banking company has not always understood or attended to its own particular interest,
and the circulation has frequently been overstocked with paper.

26