we have all agreed about glass-steagall. all of us agree that one of the things that did not contribute to that was the community reinvestment act. >> i agree with that. >> i want to make that explicit because some say that's what you got out of the cra. >> it goes back to the business that if you want something, incentivize it. > i just wanted to make it clear that we all agree that the community reinvestment act was good. >> let's see if the panel can go further. if these government incentive programs created distortions -- fannie mae and freddie mac admittedly came to the game later but they propelled it further -- would wall street have done quite as badly as it did in the absence of the political incentives that were out there? >> qualitatively, yes, quantitatively, no. fannie mae and freddie mac help them do it more but they did not do it because they were told homeownership was a good thing. they did it because it was a good way to make money. >> they existed because we thought homeownership was a good thing and a peo

>> the question was about glass-steagall. >> why not recreate glass-steagall as recreating glass-steagall? i don't think it is happening in that kind of black and white fashion where you direct laws that separate commercial banking and consumer banking. what is happening is in a very different way it is happening before our very eyes. one thing, a former fed president of kansas city is a big advocate of having financial institutions specialized institutions and when they were specialized institutions we had the best financial system in the world so financial capital markets has been one of our greatest exports. not everyone may agree with that but what is happening now is you have capital requirements that are keeping stirring banks out of business so you are effectively doing it the hard way and banks are fighting with the regulators to fan mail. i don't know that it is the best possible situation, but we are going in that direction. the banks don't like it. what you don't have on the flip side is ready to live -- very successful about getting big banks to get smaller. what they are prev

and a piece of it was kind of a watered-down glass-steagall.glass-steagall was the old 1930s rule that said you had to split your commercial banking operations from your, basically your casino, betting operations. and -- >> you couldn't bet with my deposit. >> you can't bet with commercially-insured deposits. but we couldn't even get the watered-down version of glass-steagall in the form of the volcker rule. it's still not there. why isn't that there? because you've got a huge, powerful, wall street lobbying machine, a lot of money coming from wall street that influenced politicians, even democrat politicians. this is not a matter of partisan politics. everybody is guilty. and the money is still determining what the rules of the game are going to be. >> and these are the people who are taking in most of the income produced by the recovery. >> not only they -- they're taking in most of the income produced by the recovery, they're enjoying almost all of the economic gains and they are using their privileged position with regard to political power

we have all agreed about glass- steagall.l of us agree that one of the things that did not contribute to that was the community reinvestment act. with that. >> i want to make that explicit because some say that's what you got out of the cra. >> it goes back to the business that if you want something, incentivize it. >> i just wanted to make it clear that we all agree that the community reinvestment act was good. >> let's see if the panel can go further. if these government incentive distortions --d fannie mae and freddie mac admittedly came to the game later but they propelled it further -- would wall street have done quite as badly as it did in the absence of the political incentives that were out there? >> qualitatively, yes, quantitatively, no. fannie mae and freddie mac help them do it more but they did not do it because they were told homeownership was a good thing. they did it because it was a good way to make money. >> they existed because we thought homeownership was a good thing and a people could not finance it -- >

>> you think about what happened with the great depression, you had glass-steagall, which was 30 pages and now you have dodd/frank, which is 3,300 and counting. so rather than going with a simple fix that was easy to follow and easy to understand, that was a level playing field for all participants and that would accomplish the goal of what glass-steagall did, which is truly ending too big to fail by splitting up the banks, what we have is this regulatory death by a thousand cuts, which nibbles around the edges and has exceptions and wavers and loopholes to the exceptions and the wavers, which gives the regulators and the lawyers plenty of stuff to work on. >> which is part of what happened? >> dodd/frank has the potential to end too big to fail, but we haven't done it yet, because it gives the power to the regulators. plus, we're coming up on the third anniversary of that whole process. there is so much power in section 265, they could institute glass-steagall. >> living wills, banks have to write a document saying, if i blow up, here's how you get rid of me without endangering the wh

>> the question was about glass-steagall. >> poker is an advocate of referring glass-steagall. i don't think it's happening in that kind of sort of black-and-white fashion where you redirect laws that separate commercial banking and commercial banking. what is happening in a very different way it is happening before a very eyes. one of my favorite people is that president of kansas city tom connick who is a big advocate of having having financial institution specialized institutions and when they were specialized institutions we have the best financial system in the world. the financial capital has been one of our greatest export. not everyone may agree with that but what is happening now is to have capital requirements that are keeping certain banks out of businesses so you are effectively doing it the hard way and the banks are fighting with the regulators tooth and nail. i don't know that it's the best possible situation that we are going in that direction where the banks like it or not. they don't like it. what you don't have on the flipside is regulators are successful abo

do you think morgan stanley would be better off if glass steagall hadn't been repealed?ould make a lot of difference. we were never a merge commercial and investment banking entity unlike the other institutions and even if we were better off i'm not a fan of repealing glass steagall. if you look at the institutions that got into trouble in the financial crisis almost to an institution they were single business model institutions whether it's countrywide, or whether it was lehman brothers or bear stearns, it was not the congom rate commercial blanking. the argument that glass steagall causes i have no dog in that fight but it doesn't hold up. >> you said in a recent interview, that there is a very small chance we could see another financial crisis in our lifetime. that's a pretty bold statement. but what about the risks that might be being offset into the shadow banking system right now and how do you manage your company company to avoid being impacted by any risks that exist there? >> happily what i said was, there is nearly zero chance of seeing a financial crisis like

i agree with the last caller that we need to bring glass- steagall back. and we need to break up these banks because i don't care that there's been a little bit of demand that they carry more money on the books. they are still too risky. they are the one reaping the profits. and main street isn't. advantagesthe same to smaller banks or middle sized ones that were not risky. we encourage this risky behavior. , the 90%of the country or everyone assay, is struggling. that we dowith you not have to do something dramatic. i believe we do and if anything happens, we will be right there let the wholeot world fall apart because we are interconnected. would you think of the janet yellen, as a progressive i was totally against larry summers and i can't believe the president listened to us. do you really think that she will do something? i would like a little bit of interest on my bank account so that i don't have to invest in wall street and ideal to make five percent. get allld the big banks of these advantages? they have all the power to come against any kind of r

when we reverse it the glass- steagall act, they have stuck their straws into washington and suck every of our tax dollars away. the cure is public financing of elections. true public financing of elections. so happy in switzerland and denmark? that is because they have public financing of elections. that is the disease. until we go after that, i agree with the previous choleric performing said that you have to push back very you need to push back about how we fund our campaigns. you can't fire these senators thecongress people because corporations have put them there. the special interests have put them there. we have to have true of the financing of elections. we have to get wall street. they own washington. the people don't own it. that is the cure. thank you, steve. i am watching you. you thet me share with comments of jonathan last from "the weekly standard." he writes. thanks for your calls and comments. coming up in just a moment, we will turn our attention to washington this week. the senate convenes to talk about raising the debt limit. more immediately, acr vote expected early

he also shepherded through glass/steagall. one thing in glass/steagall, it lightened the hand of regulation. was actually called fed light. i think we need someone who's not been part of the washington/wall street access. i think janet yellen is an extraordinarily capable person. i join a whole set of people who believe she would be a fresh perspective, a fresh voice at the fed -- >> why do you -- why aren't you equally critical of the fed for having kept money so cheap for so long, which a lot of folks also think happens to be one of the causes of the financial crisis? when everyone seeks yield because money is cheap, desperate to cover inflation, this is what happens. and janet yellen would be considered very dovish and likely to continue that same policy path. >> i actually operate in the real economy. while i did public service for more than two decades. i've been in the real economy. i'll tell you, things are very fragile out here. we need policy makers who understand that and are doing what they can to buoy the economy.

the second thing there should be done, there should be a glass-steagall, 2.0. to separate banks. commercial banks, remain boring and risk-taking banks like jpmorgan if they want to look and act like a hedge fund, that's fine, they shouldn't benefit from fdic insurance and cheap form of funding they have enjoyed up to now. ashley: at what point, mark, the banks would argue, they keep saddling them with regulation, i understand why, does it make them less competitive in the global economy if other banks don't have the restrictions? >> other problem with that argument, we saw excessive risk-taking of those banks crippled our global economy. our economy is financialized, three decades ago, roughly banks represented 15% of our economy. now in the u.s., if you look at top banks, they represent the majority of our economy. what happens? strength or weakness in the risk take of our banks, impact the strength and weakness of our economies and for the local person, regards to their ability to get a decent job. i would say we need more regulation. we swung in 1999, when w

and so, what i believe is happening is we're regulating ourselves back to some form of glass steagall. we don't -- you know, if you want to take insured deposits, deposits insured by a government, and then you want to trade your own account and you want to be an investment, or you want to be an insurance company, then what volcker is saying is you have to have more restrictions on those activities, because the government's standing behind the deposits. and so, what i think is -- the hurdle we're dealing with is how we begin to work our way back, to be competitive, but get out of some of the things that are necessary to protect bank depositors. that's what we do. >> can you do that, though, when you still have this whole too big to fail? you know, requecan you protect consumer deposits? >> i think banks can. they have to limit the amount of risk on their books. they have to reduce the amount of leverage. they have to be careful what they're sources for liquidity, which is what happened before. you have deposits as a source of liquidity. but when a crisis comes, because of the governmen

gramm leach bliley act became the law of the land graham lee's bliley essentially gutted the glass steagall act of one nine hundred thirty three by removing barriers in the banking business that had previously prevented a traditional checking and savings commercial bank from acting like a stock broker. and by supporters commercial banks were allowed to merge with investment banks to form these massive too big to fail banks that dominate wall street today and that have dealt a blow after blow to our national economy. banks also began to leverage depositors money using it to play the stocks and commodities markets this is the result of all this is what we know as the crash of two thousand and eight in an attempt to undo some of the disastrous effects of graham leach bliley in the commodity futures modernization act congress passed and president obama signed into law the dod frank wall street reform and consumer protection act of twenty eight. but while dodd frank was passed a health reform wall street and to rein in the power of financial institutions congress was taken over by republicans in

his lucrative ties to wall street, the fact that he supported repeal of glass-steagall, the fact thatail system. is he really yet. tiger? what he really delve back on money printing? that is the question over larry summers. testing with janet yellen is she is being seen as a likely person to be the nominee because she would be easier to get to the senate banking committee and the president would not way of much-needed capital over a fight in senate banking over his fed chair nominee. we may hear who the nominee is before the debt fight is underway in washington d.c.. giving it back to you guys. dennis: pretty interesting stuff. tracy: i will ask where the phrase, cured dukes came from. lori rothman and adam shapiro did the printed the jobs report to find out what is holding back hiring. dennis: football season is finally here and teams of to bring in more revenue than ever, take a closer look at the big money behind the nfl. that is next. thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with th

larry summers is the person who presided over the repealed the glass-steagall and this has caused all the financial hoopla that we have experience. people should be writing a president to suggest there are better candidatecandidate s than larry summers to lead the fed. [applause] 's. >> thank you for that. yes, sir. >> good afternoon congressman conyers ladies and gentlemen. i am a licensed realtor working in the city of detroit and i would like to ask since there are $56 million of the $100 million settlement that the banks had to pay through the robo-signing case that was solved just a few years ago, out of this the 56 million coming to detroit is all for demolition. none of it is being spent for what it was originally tended -- intended for to help people with foreclosure and to transform the city of detroit. is it too much to get our congressional delegation to work with local elected leaders in order to spend the 230 million remaining in the bonds to help restore our city both residential and commercial away from the areas of downtown and midtown? thank you. [applause] >> grade q

she wants to revisit glass-steagall.oo slowly and was asked about this eminent domain thing going on in california right now where local government is using eminent domain to get haircuts and mortgages so they can get rewrites of mortgages. she says communities should get involved. she is interested in watching it. she did not give it a full endorsement but says it is interesting and communities should get involved. stuart: i would like to see glass-steagall come back. i'm not with her on imminence domain. good stuff, thank you very much, indeed. and that may have jon stewart mother reason to make fun of me. on tuesday night, listen to this. >> how could any patriot you this decides a fantastic development hashtag >> president obama has just let us into a humiliating defeat. >> defeat? who did we lose to? sanity? you beat us this time, rational for thought, but we will get you. stuart: we lost to the russians and the world has lost, that is my opinion. sandra: you are asking for more. how does that make you feel to have

saying they're not only legal but you can't regulate them in the case of what's called the glass steagall act we took regular commercial banks your savings banks your piggy banks and mix them allow them to mix up and use your government insured deposits to gamble through investment banks on derivatives and other speculative junk it was like saying ok we're going to replace. bank vault with a roulette wheel so summers is the daddy of the deregulation disaster and yet obama's talking about making him the most powerful economic official in the world incredibly powerful plus. under new laws the fed is also the number one banking regulator so he can be regulating the banks that he let run amuck. and by the way who have been his clients this guy's worth now about thirty seven million dollars. selling his so-called consulting services to the very banks that he let run amuck and her accounts i know you covered the stories around the world and also in the u.k. as you mentioned b.b.c. and then the great health dot com of course the web site people don't get all the latest i want to talk mentioned q

saying they're not only legal but you can't regulate them in the case of what's called the glass steagall act we took regular commercial banks your savings banks your piggy banks and mix them allow them to mix up and use your government insured deposits to gamble through investment banks on derivatives and other speculative junk it was like saying ok we're going to replace. bank vault with a roulette wheel so summers is the daddy of the deregulation disaster and yet obama's talking about making him the most powerful economic official in the world incredibly powerful plus under new laws the fed is also the number one banking regulator so he can be regulating the banks that he let run amuck. and by the way who have been his clients this guy's worth now about thirty seven million dollars. selling his so-called consulting services to the very banks that he let run amuck bank accounts i know you covered the stories around the world and also in the u.k. as you mentioned b.b.c. and then the great help dot com of course the web site people don't get all the latest i want to talk mentioned quickly

glass steagall and we had the commodities futures trading act which enabled derivatives to go global they had the reclassification of derivatives as gambling instruments to legitimate instruments of finance as part of the global financial ization of the economy most corporations by the way are in the business of finance they're in the biz of lending famously g.-mac general motors except as a corporation makes most of the money and not for that g.m. not making cars ok that's just one example there are many examples but just take a look at the last ten years as what happened to one portion of the american population the black population they were told to buy houses under bush they then got caught up in the subprime scandal which was a manufactured crisis they've had the biggest wealth confiscation in their history going back to slave days and they are now feeding into america's person system which is owned by the same financialization the same securitization the same banks on wall street so the black americans have gone from slave to middle class back to essentially imprisonment and th

clinton but then what happened at the end of clinton administration max we had the repeal of glass steagall and we had the commodities futures trading act which enabled derivatives to go global they had the reclassification of derivatives as gambling instruments to legitimate instruments of finance as part of the global financial ization of the economy most corporations by the way are in the business of finance they're in the business of lending famously g.-mac general motors acceptance corporation makes most of the money and not for that g.m. not making cars ok that's just one example there are many exam. but just take a look at the last ten years as what happened to one portion of the american population the black population they were told to buy houses under bush they they got caught up in a subprime scandal which was a manufactured crisis they've had the biggest wealth confiscation in their history going back to slave days and they are now feeding into america's prison system which is owned by the same financialization the same securitization the same banks on wall street so the black a

the great depression when banks collapsed and drew us into a disaster we passed a so-called glass steagall act in one thousand thirty three the banking act and that was supposed to control what banks did they went to work to undo that reagan supported that so we did it ending up in one thousand nine hundred nine when ironically the deregulation pushed by reagan was signed by bill clinton the president at that time and literally eight years later in two thousand and seven having deregulated the banks the banks took us over the edge and showed us that they didn't know how to make safe loans that they packaged loans in an irresponsible way that they raided them in an irresponsible way and we're still living with the effects any reasonable person would understand that deregulating banks was had been now a disaster for us twice in seventy five years producing the worst cataclysmic economic downturns we can imagine any reasonable judge would have to say we've got to try something other than that i think that you know we're talking about the one percent of course you're talking about banks as wel

part of the whole process that occurred during clinton he also of course they got rid of the glass steagall what separates the regular banking function from the speculators but i noticed and you do a lot of work around the country performing and you go into casinos i'm sure and there is a casino mentality where in the casino once they get you in a casino they try to keep you liquored up they throw hot babe in your face the slot machines are rigged so that if people start to walk away from the slots they tweak them so that they start winning paying out a little higher payouts there's a whole behavioral science to see. those now where they have your frequent casino use card and they use that data big data to emotionally hard to you they know what your weaknesses are just one reason why they collect all this data through the n.s.a. is that they can behaviorally target you a casino to get you to throw away as much money as possible and to become part of the a ball of virus which is the american economy is there at analogy to see between casinos do you work because you know we're here last week

part of the whole process that occurred during clinton he also of course they got rid of the glass steagall what separates the regular utility banking function from the speculators but i noticed and you do a lot of work around the country performing and you go into casinos i'm sure and there is a casino mentality where in the casino once they get you in a casino they try to keep you liquored up they throw hot babe in your face the slot machines are rigged so that if people start to walk away from the slots they tweak them so that they start winning paying out a little higher payouts there's a whole behavioral science to see. now where they have your frequent casino used car and they use that data big data to emotionally hard to you they know what your weaknesses are that's one reason why they collect all this data through the n.s.a. that is that they can behaviorally target you a casino to get you to throw away as much money as possible and to become part of the a ball of virus which is the american economy is there an analogy to see between casinos do you work because you know we're hearin

part of the whole process that occurred during clinton he also of course they got rid of the glass steagall what separates the regular banking function from the speculators but i noticed and you do a lot of work around the country performing and you go into casinos i'm sure and there's a casino mentality where in the casino once they get you in a casino they try to keep you liquored up they throw hi babe in your face the slot machines are rigged so that if people start to walk away from the slots they tweak them so that they start winning paying out a little higher payouts there's a whole behavioral science to to see. now where they have your frequent casino used car and they use that data big data to emotionally hard to you they know what your weaknesses are that's one reason why they collect all this data through the n.s.a. that is that they can behaviorally target you a casino to get you to throw away as much money as possible and to become part of the a ball of virus which is the american economy because there are now do you see between casinos do you work because you know we're here la