Patrick Kennedy to Introduce Bill to Repeal Gramm-Leach … Maybe

One thing that astounds me about this whole financial crisis is that no one–no one–in a position of power has seemingly considered undoing the damage that was done when Gramm-Leach-Bliley started allowed agents to dress up as banksters, banksters to dress up as stock brokers, and stock brokers to dress up as insurance agents. Rather than passing new legislation to set up a super regulator to regulate companies that are too big too fail, wouldn’t it be smarter to go back to the laws that prevented companies from getting too big to fail in the first place? And even if there are good reasons not to go back, don’t you think we ought to at least consider it?

So I was thrilled yesterday when Patrick Kennedy said he was goig to introduce a bill to repeall Gramm-Leach-Bliley.

One thing that I think is maybe one of the many causes of this and that I will hold myself accountable for is voting for the Glass-Steagall reform. And I, for one, am going to introduce legislation to repeal that repeal. Because I don’t believe we ought to be having, as has played itself out, AIG insurance companies doing banking business and banking businesses doing insuring business. And having apples over here and oranges over here and everybody’s getting these financial products all mixed and matched. You’ve got derivatives and debt swaps and what are these things happening, you’ve got people taking loans out and then taking insurance out on the loans because of another part of the company. I mean it just seems we’re rife with conflicts of interest. 

Cool! I thought! We can finally talk about putting oranges and apples back where they belong!

So I called Kennedy’s office to find more details. And it sure sounds like Kennedy is less convinced he’s going to pursue repealing the repeal. Here’s his statement.

"We are in the middle of a crisis that has reached around the globe and hit home in Rhode Island. Now is the time to have an open and honest conversation about every aspect of our nation’s financial system. Through my work on the Oversight committee, I look forward to being part of this conversation and making up for eight years of lost time. While we need to take a good hard look at the legal framework established under the Graham-Leach-Bliley Act, this issue is much bigger than any single law.

"Congress and the American people need to address our broader financial regulatory structure as well as the culture on Wall Street that enabled the mistakes of the past decade. I am proud to be continuing this conversation and have reached out to my colleagues on the Financial Services committee to explore the best available options.

"After the events of the last two years, I think we owe it to the American taxpayer to put every option on the table," said Kennedy.

Sure, this is a bigger issue than any one law. But isn’t that the point? Companies that are bigger than the laws that regulate them?

It sounds like there are few on Financial Services Committee who have given this much thought. I hope Kennedy persists here, because we need to at least ask the questions he’s asking. 

39 replies
  1. Leen says:

    Patrick Kennedy

    “there are people who are anxious to learn from mistakes”

    Whoa what a concept

  2. Leen says:

    Patrick Kennedy
    “Banks that just do savings and loans do savings and loans”
    “Investment banks that do investment banking do investment banking”
    “Insurance companies that do insurance do insurance”
    “What’s such a big problem with that”

    Talking blue collar talk. Damn straight

    Whomever that other guy is he said we don’t want to “tie anyone’s hands”

    Wrong. TIME TO TIE

  3. Leen says:

    Former AIG Chairman Greenberg ” we’re not going to tie our hands”

    Tie their hands yesterday all ready

  4. MadDog says:

    Totally OT, but in regard to your “Is Rahm Congressman A?” post (and nextstop’s denial that the sun rises in the east), the NYT reports that the White House confirms, yes Rahmbo is Congressman A:

    …The indictment describes the member of Congress as United States Congressman A, one of a series of unidentified public officials listed throughout the document only by letters of the alphabet. White House officials confirmed that Rahm Emanuel, a former House member who is President Obama’s chief of staff, was Congressman A…

    Now to figure out how to convince nextstop that the Earth circles the Sun.

  5. skdadl says:

    In that clip you’ve embedded, EW, there’s Greenberg fending off serious thought of structural restrictions with his process talk. Man, I am beginning to understand the process talk, and it is driving me bananas.

    The same thing, on very different turf (torture), happened to us in hearings here this week. What all these guys seem very good at is telling us that, when things go wrong, their ever-more refined process will do the corrections — after the fact.

    Major problem: after the fact means, in our case, after bodies and minds have been mangled; and in the case before you means economic meltdown. The technocrats just don’t seem to get that part. They’re too busy being upbeat about how refined the process becomes as we move towards the future.

    Can we imagine ordinary citizens arguing process before a judge? (Actually, I can: I saw that done once, by a guy who argued that the night he’d just spent in jail had made him a reformed person. He was a Scandinavian visitor to the country and read a flowery speech from a scroll he’d written overnight about being so carried away by the beauty of our country that he’d gone a little wild, so the judge smiled and let him go.)

    Enough with the process. We need structure; we need laws, and we need penalties, this time for the guys who don’t think the law applies to them.

    • jdmckay says:

      Enough with the process. We need structure; we need laws, and we need penalties, this time for the guys who don’t think the law applies to them.

      I don’t know why this is a sudden revelation. There’s a lot of people been shouting this from the mountain tops for a long while now, mostly to deaf ears… including the “progressive” community.

      Anyone thinking Kennedy has any chance whatsoever of moving this thing is deluded. He’s one non-dominant cell in a federal organism fully wired to keep doing what it’s been doing… eg: nothing.

      This starts & ends w/Obama because he’s the only one w/megaphone loud enough to move masses. BO’s chosen not to do this… not to focus any light on how/why all this happened, not to take committed meaningful action to prevent it’s re-occurrence, nor to lay out “another way”.

      He’s jumped in bed w/all that made it happen, he’s betting our future on the same financial crook’s helmsmanship in steering all of us out of it by the same means they pulled us into it. Obama/Geithner’s proposals are, literally, another roll of the dice… a gamble. A multi-trillion $$, blow on the dice gamble.

      Show me one dem congressman over last 8 years, who spoke up against any of W’s multi-faceted abuses, who’s congressional actions or words had any affect on checking (much less correcting) what was then converging train wrecks.

      Was there any… even one? Does anyone even remember? Did they accomplish anything more than sticking a post’em on the passing train… visible to nobody, and blown away to oblivion in moments?

      • skdadl says:

        Well, it’s not the structure, the laws, and the penalties that come as a revelation to me (nor the touchstones of democratic principle and human decency) — I like to think that the adult moi has never been out of touch with those.

        But I have never seen North Americans so thoroughly snowed on just about every front as we have been through this decade. This past week here has seen one triumph of the utterly hare-brained (from government ministers and agencies) after another, and I am feeling deeply discouraged.

      • BayStateLibrul says:

        Show me one dem congressman over last 8 years, who spoke up against any of W’s multi-faceted abuses, who’s congressional actions or words had any affect on checking (much less correcting) what was then converging train wrecks.

        Barney Frank — The Social Security investment in the stock market train wreck, perhaps?

  6. emptywheel says:

    Well, if anyone wants to encourage Kennedy, his DC office is (202) 225-4911. I presume you could only leave a message over the weekend, but they’ll get it.

  7. goldstandard says:

    Next to the military/industrial complex, the lobbyists working on behalf of the bankers obviously have a lot more clout than we the unclean masses. Our representatives thus far have been as worthless as tits on a bull. I sincerely hope that Kennedy is successful. However, unless we the people make a big enough stink about the goings on in D.C. they will steamroll us just as they have for the last six months when this financial crisis began to take hold. Are we really to believe that our elected representatives are working for us or are they still being sold off to the highest bidder? They gutted Alan Grayson’s bill and they will probably do the same to Kennedy.

  8. MarkH says:

    Patrick Kennedy said,

    “there are people who are anxious to learn from mistakes”

    Whoa what a concept

    Damn hippy. Get off my lawn!

    Actually, I thought Greenberg was pretty amazing. Few of the reps could even offer good questions. Nobody came close to laying a glove on him. Apparently their preparation for this hearing wasn’t very good. It does not inspire confidence.

    Greenberg did say one thing, somewhat offhandedly, which I thought was very good. Referring to possibilities for a super-regulator and the like he mentioned that in many countries they have individual regulators for each significant kind of business (e.g. insurance, banking, commercial banking, etc.) and one for supervision of holding companies (possibly what we would call a super-regulator). It sounded eminently sensible and leaves me wondering why we can’t do something that obvious.

  9. bmaz says:

    Representative Patrick J. Kennedy:

    407 Cannon House Office Building
    Washington, D.C. 20515
    (202) 225-4911 ~ Fax: (202) 225-3290

    Rhode Island:
    249 Roosevelt Avenue Suite 200
    Pawtucket, R.I. 02860 ~ (401) 729-5600

  10. tbsa says:

    Those on the financial Services Committee are part of the problem. I would bet they are all bought and paid for. The Gramm-Leach-Bliley law will never be repealed, the bankers will pay off whomever they have to in order to make sure of that.

  11. KayInMaine says:

    I’m sure Bill Clinton will try to stop Kennedy from doing this, because Clinton is blame for everything Reagan did, George H.W. Bush did, all that happened under his watch with his right wing House & Senate, everything George Bush did and didn’t do, and now that President Obama is in the White House, Clinton is to blame for every dollar spent.

    • ImperialFlow says:


      To quote Selise:

      no, not everything. but the clinton administration is responsible for, you know, what they actually did do. that is all.

      Having looked at the timeline of events laid out by Selise, it seems pretty hard to absolve officials during the Clinton era, including the Clinton Administration from at least complicity, if not culpability, here.

      Why is Bill Clinton some kind of sacred cow?

      • KayInMaine says:

        I know. We should hang them all. In fact, why don’t we invite the Gramm family to attend the hanging. Yeah, yeah, we could invite all the Wall Street schmucks too who were duped by Clinton and his Enron Loophole.

        By the way, how come Bill Clinton didn’t force the Congress to act after Enron imploded? He wasn’t president at the time, but surely, he must have told Georgie to do nothing about it and keep those CDS wrapped up like xmas presents. Why would he do that? Does he not love American retirement money?

  12. Teddy Partridge says:

    This sounds like someone had a chat with young Kennedy.

    He should be encouraged in this repeal effort. Nothing with Phil Gramm’s name on it should survive this fiasco.

  13. bobschacht says:

    I think Eric Holder should get some TARP money (or money from someplace else) to put a large team of investigators with financial expertise to examine the books of AIG. There was some pretty major fraud going on there, from what I’ve read. He and Geithner need some close collaboration, because Geithner knows where most of the bodies are buried. He also seems to know how many zombies are walking about.

    In fact, I think the DOJ budget probably needs to be doubled. They’re going to need it to investigate all the financial fraud, as well as all the Bush-Cheney crime syndicate shenanigans. Let 100 flowers (i.e., investigations) bloom!

    Or maybe just send EW over with her weed whacker.

    Bob in HI

  14. fatster says:

    With the weekend coming up, and the banksters running amok, I rummaged around and found this from my earlier DFH days. Perhaps some of you will join me in dusting it off and singing it once again–loudly.

  15. wahwahsmith says:

    We are in the middle of a crisis that has reached around the globe and hit home in Rhode Island.

    Oh, goody! A global reach around!

    • Leen says:

      that is a good add. Have always wondered why there are not more commerials for visiting the coast of Michigan…you know eco tourism and all. I know from spending many summers on the beaches off of Holland Michigan that many of the old and established families do not want the tourism thing encouraged. Many of them like having those beaches in the summer to themselves

      • JohnJ says:

        Ha, the last summer I spent on the beach at Holland Michigan a tornado came through and ripped up our tent and moved a few trailers around. Tiny thing but it cut a path right through the camp ground.

        It was right in sight of the wooden shoe factory.

        • Leen says:

          Years at family cottage ( in the family some 80 some years) up on the upper boardwalk. Oak Lodge. Lots of families have had these cottages for three generations and I would bet most of them (so many from Grand Rapids) do not want more tourism.

          Ottawa Beach store for ice cream? Cherries and blueberries galore

  16. JohnLopresti says:

    Although the diplomacy of the current summit travel in Europe is separate, some of the material in the press reflects a process of referencing the reshaping of American policy with respect to finance. Council on Foreign Relations and NYT have picturesque ruminations on the implications of a visit to Praha.

    On OffTopic legislation makeovers, Nadler apparently is coauthor of another effort to examine gag orders on Nsl’s.

  17. Cujo359 says:

    It is troubling that no one is stepping up here. The financials have enormous power over Congress and the President, that much would be clear even if you never visited This doesn’t bode well for America, because until these companies are under control, we’ll have nothing better than the pitiful economy we’ve had for the last decade.

  18. MadDog says:

    Morning EW!

    Mikey Isikoff is at it again:

    “Holy Hell” Over Torture Memos

    Attorney General Eric Holder wants to release classified Bush-era interrogation memos. But U.S. intel officials are fiercely lobbying the White House to block him from moving forward…

    Now off to start those weekend chores. I’ll stop back later to join in the fun. *g*

    • Leen says:

      Demonstrating a wee bit that might of meant what he said during his hearing. Holder “no one is above the law”

      Wonder if Colbert could make a rap song out of that line? They sure could do a sequence of many of our congress folks repeating this line

  19. PJEvans says:

    Over at the Great Orange One, I wa reading about Moyers’s interview of William Black, who was a regulator some years back. Black brought up the law that says that insolvent banks have to be seized, and made it clear that this is a required tool that isn’t being used.

  20. freepatriot says:

    how can these assholes SEE THE FUCKING SOLUTION, and then nibble around the fucking edges of the solution like the solution was fucking cancer or something ???

    what kind of psychosis or lack of backbone motivates these people ???

    I think I’m right

    I might be right

    I could be right

    except I’m a chicken shit, and I can’t be positive I’m right

    so I’ll be a chick shit and do nothing

    except talk about that time I was almost right

    and that time I almost did something

    cuz almost being right is almost as good as being right …

    exchanging a walk-on part in a war for a leading role in a cage ???

    when did Roger Watters become so prophetic ???

  21. Sara says:

    Yes, if you didn’t see the Black interview on Moyers last night, do look for it on PBS’s site.

    I’ve been watching another relationship. John Kerry has just hired as his Chief Investigator for the Foreign Relations Committee Jack Blum. Name may not ring a bell, but this is the guy who took down BCCI back in 1988 — and when Clayborne Pell stopped Kerry’s investigation after he turned up Clark Clifford (dem) and links to the Bush Family — Blum handed over his material to the Bank of England, which was forced to close down BCCI. Blum also handed over to NY State Prosecutor, Robert Morgenthau, the necessary evidence from the work he had done for Kerry’s subcommittee so that he could persue state charges against some of the BCCI Bankers in the NY Courts. Blum has been working at it all these years, and I smell something interesting if Kerry (with no Pell to hold him back this time) is bringing back his hot-shot investigative counsel and setting him up with the Foreign Relations Committee. Something to keep an eye on, me thinks. No reason in the world Kerry could not open up on International Banking and Finance from Foreign Relations.

    • Nell says:

      John Kerry has just hired as his Chief Investigator for the Foreign Relations Committee Jack Blum.

      Thanks for this news, Sara; that is encouraging. How did you learn of it?

      The lack of readily available information on staff of congressional committees and members’ offices is IMO a major mechanism for shutting out grassroots lobbying and magnifying the power of insiders.

      For instance, had someone not reported the news that Kerry (or someone on the Foreign Relations committee) hired CIA torturer John Kirakou for the committee, there’d be no way of telling from the committee’s website or news releases.

      Do you have any tips on how to find out the names of House or Senate committee staff?

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