Newt Gingrich Calls For Reinstating Glass-Steagall, Admits Deregulating The Banking Industry Was A Mistake

Author: November 9, 2011 2:09 pm

As Speaker of House during the 1990s, Newt Gingrich and the Republican Party were instrumental in killing the Glass-Steagall Act, which separated investment banks and traditional lending banks. The combining of these banks in the wake of the repeal of that regulation led to the economic collapse in 2008. In an interview on ABC with Jake Tapper, Gingrich admitted that deregulating the banking industry was a mistake. Here is the exchange between the two.

???TAPPER: One question I want to ask has to do with your call to repeal the Wall Street reforms, Dodd-Frank. I don’t think a lot of Americans would understand why anyone would want to repeal regulations that happened after this calamity on Wall Street. If you disagree with those regulations that were imposed, do you agree at least that there should be some new reforms or regulations?

???GINGRICH: Sure, there should be very decisive reforms. I think, in retrospect, repealing the Glass-Steagall Act was probably a mistake. We should probably reestablish dividing up the big banks into a banking function and an investment function and separating them out again.


Here’s the video:

Glass-Steagall became law in the wake of the Great Depression. It established regulations that divided investment banks and lending banks so that banks would not get too big, nor would they be able to gamble with money used for lending. Reinstating the regulation would break up the big banks such as Citigroup and JPMorgan Chase. When Newt Gingrich says that deregulating the banking industry was a mistake, it’s worth taking seriously. A Republican admitting to a mistake is very rare so hopefully this admission will spur Democrats and Republicans alike to make reinstating Glass-Steagall a reality so that big banks will never again threaten the health of the American economy.

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6 Comments

  • Protections (Glass-Steagall ect.) were put in place so that America would NEVER have to go through anything close to another Great Depression again. This lesson was taught to American school children when I was growing up in the 50’s and 60’s. The laws were meant to be permanent. Greedy little men bribed congressmen and our protective laws were killed off. Two years before Glass-Steagall was “put down” Citicorp was formed. It was formed illegally and should have been prosecuted and forced to break up. Instead it was given a waiver so it could operate until enough congressmen were bribed and the law could be done away with completely. That’s outrageous! We need Pecora 2 hearings to rid Washington and Wall Street of the corruption (our cops are sleeping with the robbers) then put the protective regulations in place.

  • I think I just saw Elvis. He was riding a golden chariot in the sky, being pulled by a team of 20 flying pigs. He had a minigun that fired Xanax capsules and was chasing the Four Horsemen of the Apocalypse across the sky.

    I think I can believe what I just read here, after seeing that.

  • Glass-Steagall was effectively repealed by Fed Chairman Greenspan in 1996, when he unilaterally declared that bank holding companies could own up to 25% interest in investment banks. This followed an original weakening back in the 1980’s. We need the original, pre 1986 Glass-Steagall Act reinstated.

    And jail Alan Greenspan and throw away the key.

    http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

  • Of course it’s the truth, which will cause him to very shortly be asked to leave the race.

  • Sorry? What is he sorry for? That the banks got so greedy they screwed up a wonderful scam? Surely they knew what they were doing when they repealed Glass-Steagall. They knew what the banks would do, they did it leading up to the Great Depression. Did Newt and his cohorts think it would turn out different? Or are they just suprised that the people are rising up and fighting back?

  • Every once in a while he slips up and manages to speak the truth, like the time he said the Ryan budget was right-wing social engineering.

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