Masters of the Obvious

The real question is whether or not they'll follow through.

Bloomberg:

A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc.

Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that’s both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.

Those walls came down with passage of the Gramm-Leach- Bliley Act of 1999. A proposal to reconstruct them, made by U.S. Senators John McCain and Maria Cantwell on Dec. 16, would prevent deposit-taking banks from underwriting securities, engaging in proprietary trading, selling insurance or owning retail brokerages. The bill could also force the unwinding of deals consummated during the financial crisis, including Bank of America Corp.’s acquisition of Merrill Lynch & Co...

Although Cantwell is likely sincere, McCain- who wanted Gramm as his Secretary of the Treasury- is most likely posturing in his usual loose cannon mode.

However, a real re-instatement of the Glass-Steagall Act would go a long way to stabilize a recovery, which is the principal reason it won't happen. A real recovery that allowed the middle class to get back on its feet would reverse the trend towards oligarchy. That won't be allowed to happen.