It seems, as of late, that Mr. Volcker’s suggestions have been ignored by the administration that called on him to save the country from the closest we have been to economic wreckage since the Great Depression. Why, you may ask, are they ignoring a prominent economist and knowledegable expert? Volcker has been suggesting bringing back a modern form of the 1933 Glass-Steagall Act that was passed during the Great Depression. Its provisions included the prohibition of bank holding companies from owning financial companies, presumably those involved with stocks and other derivatives. The Glass-Steagall Act was effectively repealed in 1999 by the Gramm-Leach-Bliley Act, allowing banks and brokerages to combine and reap tremendous profits at the expense of the average citizen. Of course, most big banks are completely against such an action (how can they make those fat profits they’re starting to make again?). The banking lobby is calling it an antiquated law that would be ineffective in today’s climate and consequently make America much less competitive on a global scale. Volcker, understanding these criticisms, retorted:

“People say I’m old-fashioned and banks can no longer be separated from nonbank activity…That argument,” he added ruefully, “brought us to where we are today.”

Economist and Nobel laureate Joseph E. Stiglitz has echoed the same sentiments as Volcker but fully cognizant that the former Fed Chairman is “embarked on a quixotic journey.” Former Citigroup CEO John S. Reed has joined the small chorus of Glass-Steagall-ites and has endorsed the same proposal saying it would “go a long way toward building a more robust financial sector.”

I agree with these men in saying that banking activities should be completely separate from other financial activities. Unless President Obama’s new proposal has better guidelines for these banks, what’s to stop them from repeating their actions with a resulting taxpayer-funded bailout? Limiting executive pay? That’s almost a laughable offense if they weren’t serious. Maybe the new “Too Big to Fail” bill will reveal the insights to which way the administration and Congress are planning to deal with the current crisis.

I think our anti-war Representatives and Senators are compromising on their values and succumbing to the bullying tactics of both the White House and other pro-war lobbyists and politicians. I find it ridiculous that we can keep funding a failed war for which we have no real answer for our occupation in the area and at the same time can’t provide for those who live in our own country (eg the poor, those without healthcare, etc).

Another important bill passed recently with the Democrats again heeding to the Republican demands. The Alternative Minimum Tax (AMT), which originally meant to tax the wealthy who usually end up paying little to no taxes, has in recent years affected more and more households which aren’t considered to be especially wealthy. Congress finally decided to take action and curb those affected by the AMT who should not be. I’ll discuss further in depth about the AMT in another post but for now suffice it to say that there needs to be a “patch” to fix the AMT rules. This patch was written but was immediately criticized by Republicans saying that the provisions to pay for the bill are too costly. So the bill was re-written to take out those provisions meaning we would be spending money to save money. For now it is a debatable topic over whether or not that was a wise choice but with our national debt increasing at a fast rate, there needs to be some reform over the AMT so it does not hurt those who it did not intend to affect.

And finally, it doesn’t make sense to fund a war when we have less and less funds to provide towards it. The Bush tax cuts of 2001 just make it worse since lower taxes equates to lower revenue for the government. Yet War spending and defense budgets are exorbitant and are ultimately going to cost taxpayers a lot more over the long haul. All of this is just too complex and needs to be handled by apt politicians who know what to do. And from the looks of it, we have a while until it will be solved. The Democrats need to stop yielding to Republican and White House demands and should start passing legislation that they promised when taking the majority in 2006. At this point, the Democratic compromise and reluctance is not what is needed to fix this country.