Thom Hartmann talks to Rep. Peter DeFazio about the effort by members of Congress to restore the Glass-Steagall Act.

From MyDD--Restore the Glass-Steagall Act:

The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and provided a strong regulatory environment that largely served the nation and its banking sector well. The law separated commercial banks from investment banks by banning commercial banks from underwriting securities, forcing banks to choose between being a lender or an underwriter but not both. The law was finally repealed in 1999 during the Clinton Adminstration after 12 attempts in 25 years had weaken the provisions. [...]

This week five House Democrats - Maurice Hinchey of New York, John Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington, and John Tierney of Massachusetts - will introduce an amendment that would give banks one year to choose between being commercial banks or investment banks. I support this amendment and believe it critical to the future success of the country because it will restore a balance within the finance industry letting commercial banks do what they do and investment banks do what they do.

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From The Ed Schultz Show Nov. 16, 2009. Byron Dorgan ten years after the repeal of The Glass-Steagall Act--let's revisit it. Dorgan talked about splitting up these big investment banks and said too big to fail is too big to exist. Amen brother.

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Rachel Maddow talks to Byron Dorgan who back in 1999 warned about repealing the Glass-Steagall Act of 1933.

Maddow: Did you really foresee that there would be a crisis this big?

Dorgan: Well I'm not necessarily sure I saw this big a crisis but I said at the time to the banks that if you want to gamble go to Las Vegas. I mean this was not about a crystal ball. It was just common sense at the time. You know in the 1930's we saw banks merge with you know real estate and security risks and the whole thing collapsed in the 20's and 30's and so we put in place, I wasn't here, but we put in place laws like Glass-Steagall to prevent all of that and then 1999 we were told that's all old fashioned. Let's strip that away and allow big financial holding companies one stop financial shopping and I thought it was nuts.

I mean how on earth can we forget the lessons that were so important that we learned so well and with such pain about seven decades prior?

Good question Senator. From the article a reminder on just who was right and who was wrong back in 1999:

"I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010," said Senator Byron L. Dorgan, Democrat of North Dakota. "I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness."

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had "seemed determined to unlearn the lessons from our past mistakes."

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