The world in financial crisis: a major contributing factor
By BenefitPlace.biz - BPTradeshow.com
BenefitPlace / BP Trade Show
The nature of any human being, certainly anyone on Wall Street, is the better deal you give the customer, the worse deal it is for you.
- Bernard Madoff
Let's take a look at a main source of the U.S., and for that matter, the world's financial crisis — the Gramm-Leach-Bliley’s partial repeal of the Bank Act of 1933, better known as the Glass-Steagall Act.
GLB, also known as the Financial Services Modernization Act of 1999, (Pub. L. No. 106-102, 113 Stat. 1338, enacted Nov. 12, 1999) is an act of the 106th United States Congress (1999–2001). President Bill Clinton signed it into law, and it repealed part of the Glass–Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies.
The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank and an insurance company (Wikopedia).
Thomas Jefferson said in 1802: “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property — until their children wake-up homeless on the continent their fathers conquered.”
While I am a free market capitalist, I am also a realist. When institutions, especially in the financial sector, are allowed uncontrolled free reign, disaster is inevitable. Greed, ego and the "siren's songs" of power — augmented by the influence of lobbyists — will always trump strategic and ethical business/economic decision making.
While the world was not controlled by the above legislative changes, we live in a world economy where our system, or lack thereof, leads the way. In this case it was down a street paved in fools gold.
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