My Financial Plan

Ten years ago yesterday, our country made a fateful decision — to repeal the New Deal-era regulations that protected our banking system from excessive risk.

As Dan Froomkin wrote on Huffington Post yesterday, I predicted at the time that letting traditional banks merge with investment banks could lead to massive taxpayer bailouts within ten years.

Unfortunately only seven other Senators stood with me to oppose the repeal of these regulations that had protected us since the Great Depression.

Well we've now seen what happens when we let the fox guard the henhouse.

It's time to restore oversight to the financial sector.

If you'd like to join me in supporting legislation that separate FDIC insured banks from the risks of investment banks, you can click here to stand with me.

Even John Reed, the ex-chairman of financial mega-firm Citigroup and one of the chief proponents of repealing Glass-Steagall, recently admitted that Congress was wrong to repeal these provisions. Reed believes returning to a separation of retail banking and investment banking would "go a long way toward building a more robust financial sector."

Unfortunately, John Reed is the exception on Wall Street and not the rule.

For the sake of our nationwide economic stability, it's time to begin the tough, commonsense work it's going to take to safeguard our economy.

Please click here to sign on as a cosponsor to help end the "too big to fail" doctrine that ends up having average taxpayers bailing out the biggest banks.

We have made steps earlier this year to largely stop the bleeding in our current crisis. But in order to fully heal, and make sure we maintain a healthy economy for years to come, we have to fix these long-term issues.

Thanks for your help. Together we fix our economy and build a stronger economic future!

 

Comments

[bordway]

And to think Phil Gramm was McCain's choice for Treasury.

[Peabodies]

Good on you, Senator Dorgan, good on you. Now work your skills in the Senate to RESTORE GLASS-STEAGALL. It is obvious that its repeal is the cause of the present banking disaster, just as it was necessary to put in place during the Great Depression.

If Bernanke won't go along, audit the Fed, and send him into retirement!

[MadHeart]

Simply separating FDIC insured banks from investment ones won't alone cure the problems we're facing. Strict regulations on the types of currently unregulated products (such as the CDOs and CDSs which caused the housing bubble) should also be enacted. There should be nothing--n­othing--th­at slips through the cracks of regulation on Wall St. or anywhere else.

I thank you for your efforts, Senator.

[Sundialsvc4]

"You must get rid of the High Crime."

Article 2, Section 4 of our Constitution proscribed a zero-tolerance policy for official crime. In a single pregnant sentence it went on to list two high-crimes by name: (1) treason, and (2) bribery.

Bribery...

They didn't call it "campaign contributions." Or, "lobbying." Or, "corporate free $peech."

Bribery.

Crime.

As long as crime is tolerated by a society, it will grow steadily worse. When focused at the top of the command structure, e.g. in the Senate and in the House, it can devastate the lives of 307 million people all at once. It can teach 6 billion other people that to do "business" with this country is an act of supreme folly.

The people who passed Glass understood that the industries of insurance, banking and finance form a three-legged stool that cannot by definition be grouped under just one roof. The three business objectives are both mutually exclusive and interdependent: "none can survive without the others." But crime wants them to be combined; to cross-ruff one against the other for the short term gain of the criminals and their, ahem, "patrons."

We know: "none can survive without the others."

[FreedomCorpse]

" 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 . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -- Thomas Jefferson -- The Debate Over The Re Charter Of The Bank Bill, (1809)

[PotomacOracle]

Senator Dorgan,

Your state has the most independent and efficient banking system in the country because the State owns the bank. ND has a $ i.2 billion 2009 surplus because the State owns the bank. ND has the fairest interest rate policies for student loans, commercial loans and mortgages, because ND owns the bank. Your State Bank of N. Dakota works collaboratively with all of your commercial banks to buy down interest raters, to assist in capitalization, and the maintenance of reserve requirements.

Sir, please use your podium to tell the rest of the country about your bank. It is the path to financial independence of the Federal Reserve System. A state bank in every state would create an instant surplus in every state. States have billions in assests. If each state capitalized a State own bank with 20 billion dollars and then using a 5-1 fractional reserve lending policy the states could generate $100 billion to pay debt and finance needed public and private projects for the commons.

Please get your fellow Senators to support chartering State owned banks.

[greyhound2]

In the upcoming debates in Congress on financial reform, please don't let the banks screw us again! Due to lack of any changes since the last debacle, banks now have the backing of the US government to cover their bad decisions and losses. They can go to the Casino with other people's money and if they win, they keep the money, and if they lose, they give the bill to the taxpayers. And for this, they want to pay themselves millions in bonuses. Bankers should be paid for bringing value to the table, not for coming up with a new accounting trick.

[PhilipTaylor]

WHAT MUST BE DONE:

1. We need to have New Laws to separate FDIC insured banks from the risks of investment banks!
2. Only Simplest and most visible forms of derivatives should be allowed!
3. Disarm derivatives’ RISK to STOP another cascading failure of "too big to fail" BANKS!
4. Remove "entanglements of derivatives exposures" among oversize banks
5. Reduce FED’s Regulator Responsibility = focus on monetary policy which it also FAILED miserably.
6. D0DD’s bill Creates new Single Regulator which Banks will find harder to Control
7. FED reorganized = eliminate Bankers making decisions at 12 FED Banks
8. Prevent Banks “deciding who will be their regulator.”
9. Make financial system =“Servant of the Real Economy rather than the BANKS."
10. Remove "Tier Three" "OFF-Balance-Sheet" accounting that hides debt
11. EXCESSIVE Wall Street FEES Hidden in Derivatives were used to skim money into Employee Pockets

[PhilipTaylor]

LEVITT SAYS CLINTONITES’ SUMMERS and RUBIN plus FED’s GREENSPAN TOLD CLINTON THE MARKET COULD BEST MANAGE ITSELF! = CRISIS we NOW FACE!

[vippy]

Did you read the article in Huffpo last week where one senator suggested we need even less transparency with the banks?

[SecretSister]

Thank you Senator Dorgan and I have signed your petition.

[Drdemocrat]

I feel strongly that we need to END To Big Too Fail.

[SecretSister]

Ditto!

[josephXY]

The financial experts and pundits should not be forgotten in that context. For what they were
here is an example of financial experts forecasting and commenting some time ago.
A look back that is surprising, almost unbelievable, awesome:
http://www.youtube.com/watch?v=2I0QN-FYkpw

[crunkus]

I think we should go socialist. I'm tired of our government overthrowing democracies in Latin America and Africa then privatizing their economies to American Corporations. No wonder the people on those countries live in shacks.

And before anyone throws a copy of the Constitution at me let me say this: The United States was founded as and empire.

[vippy]

thank you for clearing this up!

[FogBelter]

If only more of your colleagues in 1999 possessed your foresight, Senator Dorgan. A protection like Glass-Steagall can be repealed, even after its value has been proven, but the aspects of Human Nature that brought about the need for Glass-Steagall in the first place awaits in dormancy to spring forth and create mayhem again ... as we have seen.

If Glass-Steagall had been reinstated after the collapse of Bear Stearns and Lehman, I am certain we would be back on the road to recovery, but as it stands I'm not sure when a real recovery will take hold. We have too many individuals in positions of power that view the economic theories that inspired the repeal of Glass-Steagall as some sort of infallible religion, but their god has foresaken them.

We need a return to reason, Senator, that is our only hope. As Unemployment rises and Wall Street does all in can to gut reform our nation drifts rudderless towards the falls. We must remind ourselves that there are no fundamentals in the economy today that warrant the rise in the Stock Markets we are seeing ... it might very well be the same shenanigans that created the crisis initially that provides the incubator for this false economic spring. This situation is untenable.

I support your suggestions Senator Dorgan, and only wish that we had the political courage and common sense in Washington to reinstate Glass-Steagall ... it only protected Wall Street from itself for 66 years.

[vippy]

I am wondering, why it took so many years for even Durbin to see the light? Seems to me those involved knew exactly what they were doing when they removed the Glass-Stegall Act!

[Bpeirce]

G-S needs to be reinstated pronto.

[joebaggadonuts]

I cliked through the link. Let us know if you don't get lots of sponsors, or if you do. Thank you sir.