I am also very skeptical about it igniting anything. Simple because those that need to see it most probably will not. The average American generally does not watch that much PBS which is why they spen so much time having to "beg".

Moyers, I am afraid...is generally preaching to the choir. Progressives will watch but most others will be zoning out on some cable show or DVD.

C

The first thing they should do is kill all the bankers.

I mean, otherwise, they will just get attorneys anyway.

Thanks for this Kgb. I don't see any serious outrage getting ignited until the true cost of the bailout starts emerging. They're really doing a good job of hiding it so far. And you need a couple of minutes of attention span to grasp the causal links from financial fraud to your house going into foreclosure, and all the other problems. All we're getting so far is happy talk about the few banks who've managed to pay back the TARP funds, the finance reform 'progress', the bullish Dow, and all the rest. I just don't see any serious popular backlash at the banks happening...

Glass-Steagall was the law of the land from 1933 until 1999, and provided significant protection to the depositors and borrowers who depended upon a sound commercial banking system. It arose out of the Pecora Commission hearings, which publicly revealed the manner in which the big banks of the day had looted their customers for the benefit of a small coterie of insiders. FDR used the outrage provoked by these revelations to force through reforms over the vehement objections of Wall Street.

In addition to preventing commercial banks from engaging in Wall Street-style speculation, FDR also created the FDIC to insure deposits—necessary to restore public confidence after the widespread failures—and created the Securities and Exchange Commission to police Wall Street. To emphasize the latter point, he appointed Ferdinand Pecora as one of the initial SEC Commissioners.

The rallying cry of those who sought the repeal of Glass-Steagall was that laws passed in the 1930s were outmoded, and inadequate for the glorious new world of finance. What we need, the bankers of Wall Street claimed, is a new set of rules for the modern world, freeing us from the limitations of the past.

As with many things the bankers say, the truth is just the opposite. It was FDR who modernized banking, by reinstating the principles embedded in the Declaration of Independence, over the ancient predatory practices of the Anglo-Venetian monetary empire. The demands of the bankers for "reform," which began with FDR's death and escalated in the 1980s and 1990s, were actually demands to return to the system against which we fought the American Revolution. It was the sovereign constraints imposed by FDR upon imperial banking, that had the bankers upset. Which, of course, is precisely the point of regulation. The predators should never be happy. If they are, the regulators are not doing their jobs.

The repeal of Glass-Steagall, which was preceded by a whole series of de-regulatory measures, opened the flood-of-money gates for the wildest speculative frenzy the world has ever seen. It allowed the creation of a handful of giant super-banks which dominate the national economy, and whose failure has led to the largest bailout in history. It has also bankrupted the nation, and triggered a hyperinflationary expansion of the money supply which is destroying the value of the dollar. If the dollar collapses, the entire world—not just the economy but civilization itself—will break down.

Franklin Roosevelt was right, and those who opposed his reforms were, and remain, wrong. If we are to save our nation, we must return to the principles of national sovereignty, beginning with an immediate return to the Glass-Steagall standard.

One of the worst aspects of the Gramm-Leach-Bliley Act is that it gave the speculative side of these new monstrosities access to the deposit base of the commercial banking side, turning bank deposits into fuel for the derivatives machine. At the end of 1999, these holding companies had $4 trillion in assets and $38 trillion in derivatives, or about $9 in derivatives per dollar of assets. A decade later, as of the second quarter of this year, they had $13 trillion in assets and a staggering $291 trillion in derivatives, or $23 in derivatives for every $1 of assets. These aren't banks, they are casinos.

The top four banking casinos, JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo, represent almost half of the U.S. banking system—46% of the assets and 42% of the deposits. They also have $194 trillion in derivatives bets. Goldman Sachs and Morgan Stanley, the two investment banks that converted to financial holding companies last year, add between them another $88 trillion to the derivatives total.

This insane derivatives bubble is what blew up the global financial system, bankrupted the U.S. banks, and has devastated most of what remains of the productive capacity of the U.S. economy. It would never has been possible had the Glass-Steagall standard been maintained and enforced. If we are to survive, it is that standard to which we must return.

We must begin by wiping out all the derivatives, declaring all such bets null and void by law—in effect, restoring the law to its status before it was corrupted. Outlawing derivatives solves the problem of having to wind down all the speculative bets and the fictitious claims, and allowing us to turn out attention to the more complicated process of sorting out the valid debts from the speculative ones. The valid debts—those debts arising from real economic activity related to the physical economy—will be honored, while debts related to the speculative bubble will be set to the side, to be dealt with after the nation recovers. For debts which have a bit of both—say a mortgage on a home whose purchase price was highly inflated by the effects of the mortgage-securities scam—the size of the debt would be written down to reflect the economic value of the property.

FDR understood what Obama does not: People are more important than money. The issue is not maintaining the values of speculative finance. The issue is protecting the lives and welfare of the people. The immediate reinstatement of Glass-Steagall is a necessity, if we are to survive.