A great deal of Americans are angry right now and for good reason. Our economy tanked with the worst recession since The Great Depression. More than 15 million Americans unemployed, millions jobs lost to overseas as companies outsourced them to India and China. How did we get here?
Our politicians have screwed things up for everybody but themselves and their rich supporters. It's our Legislative Branch that creates the laws as well as repeals the laws and our Executive branch that signs the Acts and Bills into Law. It's when our politicians weaken our laws over a period of time that things start to go wrong.
The Glass-Steagall Act of 1933 was enacted to correct the banking problems that led to The Great Depression. It separated commercial and investment banks and created the
FDIC so all Americans bank accounts would be secure. When The Great Depression hit there was a run on banks as they started to run out of money and fail. The FDIC insures our bank deposits to prevent that from happening again.
The National Bank Acts of 1863 and 1864 established our national currency and created a dual banking system of Nationally Chartered Banks and State Chartered Banks. Up until the 1970's a lot of Banks were small and governed by the States and limited to doing business in their home State. Older people today surely remember some State Banks that are no longer around.
In 1978 First of Omaha Service Corp. in Nebraska wanted to do business in Minnesota and Marquette National Bank of Minneapolis challenged them in Court. The States began to repeal their anti-usury laws and allowed State Banks to compete with National Banks. This allowed National Banks to offer Credit Cards to anyone in the U.S. that they would accept.
Next there was
The Depository Institutions Deregulation and Monetary Control Act of 1980. No more State caps on interest rates. Banks look to approve loans to people with bad credit history because now they can charge higher rates and make more money on riskier loans.
But that was not enough for the Banks, they want more so there was
The Alternative Mortgage Transactions Parity Act of 1982. Up until then Interest Rates were a Fixed Rate, but now they were going to able to be adjustable and the
Adjustable Rate Mortgage was born and banks could raise your mortgage rate each year if they wanted to.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 opened up all the banks to all the States. Where the line between National and State banks was blurred before now it was gone and bank merger after bank merger as larger banks started to buy up little banks.
Still that was not enough greed to suffice.
The Gramm-Leach-Bliley Act of 1999 repeals the part of The Glass-Steagall Act that kept commercial and investment banks separated. It creates the "Financial Industry" as banks, insurance and investments all merge into one big greedy family.
The banks go crazy in the following years and make millions upon billions and all the laws that would have protected the people are gone or going away as our politicians repeal them. Those are just the highlights there were plenty of other missteps along the way leading up to financial meltdown and TARP in 2008 when the Federal Government stepped in and bailed out Wall Street.
If The Glass-Steagall Act of 1933 was left alone and Banks were still controlled by the States we would not have had the financial meltdown. Commercial banks would have still been safe and investment banks would not have been too big to fail.
Just as the politicians weakened the banks they also weakened our trade policies. Taxes and Tariffs were to protect the U.S. They were loosened and we entered into free trade agreements like
NAFTA and
CAFTA. The trade of goods without taxes and tariffs slowly eroded American jobs away. India and China built up their workforce and with lower labor rates took our jobs away.
Now the politicians in some States want to blame the Unions. The Unions are not to blame. All these years the Unions protected the workers and insured their rights. The politicians blame the Unions because they need a scapegoat and they are the only one left. When the Unions fail, who will the politicians blame next?
A great deal of Americans are angry, but lets make sure we're angry at the right people.