Earlier this week, Democratic Senator Elizabeth Warren (D-MA) went on CNBC last Friday to debate the Glass-Steagall banking regulations that were adopted in 1933, and her proposal to update and strengthen the law in a way that would likely force the big banks to spin off some of their business and stop being so damn big.
As you can imagine, CNBC is no fan of Glass Steagall, regulating banks, or Elizabeth Warren.
During her appearance on CNBC, Warren basically kicked ass, the video went viral, with over 700,000 views in a matter of days, so CNBC [...] filed a complaint with YouTube and had the video yanked from the Senator’s official YouTube account.
Here’s another copy of the video (at least until it gets taken down):
Transcript of the best bit:
CNBC’s BRIAN SULLIVAN: In the early 80s, the seventh-largest bank in America, it failed, almost set off another large banking crisis. Shouldn’t we just tell the American consumer that no matter what we do, there will be bank boom and bust cycles, no matter what the laws and regulations. You can’t protect everything.
ELIZABETH WARREN: No. That is just wrong.
CNBC’s BRIAN SULLIVAN: Why?
ELIZABETH WARREN: Just look at the history. [Sullivan interrupts at this point, but Warren talks over him.] From 1797 to 1933, the American banking system crashed about every 15 years. In 1933, we put good reforms in place, for which Glass-Steagall was the centerpiece, and from 1933 to the early 1980s, that’s a 50 year period, we didn’t have any of that – none. We kept the system steady and secure.
And it was only as we started deregulating, you start hitting the S&L crisis, and what did we do? We deregulated some more. And then you hit long-term capital management at the end of the 90s, and what did we do as a country, this country continued to deregulate more. And then we hit the big crash in 2008.
You are not going to defend the proposition that regulation can never work, it did work.
CNBC’s BRIAN SULLIVAN: I didn’t say regulation never worked, Senator. By far and away, and I agree, there were fewer bank failures in that time after Glass-Steagall.
ELIZABETH WARREN: “Fewer,” as in of the big ones, zero.
1) I don’t think that putting back Glass-Steagall would, in and of itself, do much to stabilize the banking system. Nor is there any chance that the new Glass-Steagall could pass Congress. So what is Warren doing? Kevin Roose suggests “Senator Warren isn’t trying to change individual laws, so much as move the entire political discussion of the financial sector to a different rhetorical arena and force other legislators to join her there. [...] Senator Warren is proposing reforms she knows have no chance of passage, simply to widen the boundaries of debate.”
2) The Streisand Effect may apply here.
3) Yet another example of how copyright laws are being used, not to protect creators from unfair competition that would make it impossible to make a profit, but in an attempt to censor political speech.
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