glass steagall

Peter Kilander peterk at enteract.com
Fri Nov 5 16:58:26 PST 1999



>>I assume eliminating the glass steagal restrictions will create stronger
>>financial firms. What benefits of this should the left endorse?
>
>Who said anything about benefits? I think the heavy breathing about
>it is way overdone, and the theoretical arguments against it aren't
>very persuasive. If there's a left position on institutional
>arrangements in finance, I think it'd be to create public and
>cooperative institutions capitalized through a tax on the big guys.
>
>Doug

According to defenders, one of the benefits of the repeal should be that the new larger, combo financial institutions should be more competitive in the international arena. I'm not sure what follows from a more "competitive" international financial system. Any guesses?

Taking a look at it through ye ol' base/superstructure lens, I would guess the concentration of power in the financial sector will translate into a more organized approach in the political sphere. (How do the social democracies' campaign finance laws differ from the U.S.'s, by the way?) However, as was discussed in the brief thread about the increased involvement of the U.S. Chamber of Commerce in politics, large corporations tend to be "less ideological" than smaller firms -- less zealously free-market, more willing to deal with unions and more willing to toss some crumbs to the less fortunate. On the other hand, they'll be more organized when it come to resisting increased taxes and other, stronger redistributive efforts, right?

Peter K.



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