It has been more than a year since Wall Streets risky investments collapsed our economy. Unfortunately, Congress still has not passed legislation to prevent such calamities in the future. Instead of trying to craft new legislation, I suggest that Congress look to the past. To wit:
1 Reinstate, in its entirety, the Glass-Steagall Act. The act created firewalls between commercial banks, investment banks and insurance companies following the Great Depression. It was the unraveling of this act in 1994 that undoubtedly led to our current recession.
2 Re-regulate derivatives to prevent highly risky investments resulting from the so-called Enron exception. The “Enron exception” protected the company’s on-line commodity trading from federal regulation ultimately leading to Enron’s failure. So, of course, Republicans couldnt wait to expand the legislation which resulted in runaway crude oil prices and the housing-fueled financial collapse of 2008.
3 Re-regulate banks by instituting a national usury law that would cap interest rates at 12 percent. Prior to the Reagan-era deregulation, todays interest rates would have resulted in prison sentences for loan sharking.
4 Restore the maximum income tax rates to pre-Bush levels. Better yet, restore the maximum rates to pre-Reagan levels. This could provide additional income to rebuild our infrastructure and/or reduce the national debt.
5 Close tax code loopholes which encourage U.S. corporations to establish off-shore headquarters in order to avoid taxes. At the very least, prevent such corporations from receiving government contracts.
6 Use our anti-trust laws to break up any corporations deemed too large to fail. If a company is so large that its failure would damage the nations economy, it automatically qualifies as a monopoly.
There is nothing new or Earth-shattering about any of these measures. And thats the point. They have all been proven. In fact, they kept our government and our businesses operating effectively for decades until Republicans undermined our nations economic security in order to deliver greater profits to their greedy corporate masters.