They Lost Their Way

Common Sense

"On the road from Glass-Steagall to Gramm-Leach-Billey, they lost their way, turning their backs on civilization, family values, and ethics; all those things they tell us are their core values."

"The Greatest Generation" is a term coined by journalist Tom Brockaw describing the generation who grew up in the United States during WW I, suffered in the Great Depresion, and and many of whom fought in WW II, while others supported the effort by working in factories, and paying taxes. Once the war was over, they supported the construction of highways, bridges, airports and port material handling systems that helped this nation sell goods to rebuild much of the world. At the same time, they paid taxes that enlarged universities that educated returning veterans and many others who contributed to the prosperity of all of us.

Not only did the greatest generation contribute to society, but many of their children have also, Warren Buffet, Bill Gates, and also many of our politicians.As Eisenhower had got us to invest in concrete highways, Al Gore took the initiative in creating the Internet and took the lead in moving forward a whole range of initiatives that have been important to our country's economic growth. Neither Portland cement highways, or electronic highways would exist without millions of taxpayers sharing the burden, and surely those same people and their children are entitled to share in the benefits of their sacrifice, they are entitled to share in the profits they made possible.

After the Great Depression banking officials realized that much of the damage of the depression was caused by banks gambling on stocks (creating a bubble) and the Glass-Steagall bill was enacted to protect depositors from bank failure by the creation of the FDIC, and limit the number of failures by forbidding commercial banks, that you and I need for our accounts, from acting as investment banks, buying securities based on toxic sub-prime loans with money we deposited. The law meant that the bnks we did not count on, the investment banks were not insured by us, and could fail. Banks saw this as a tax; you can make some money gambling with your own money, but you can make much more if you gamble with the public's money.

In 1999, the last of that protection was removed by the Gramm-Leach-Billey, introduced by Barney Frank (D) and Jim Leach (R), and signed into law by Bill Clinton. The "tax" had been removed, banks could gamble with money borrowed at low rates, but the risk to the public had been increased without any corresponding promise to share the profits. Economists like Kenneth Arrow offered to explain the risks and dangers of this "moral hazard" but there is less profit for the few in considering the risk to the public, so no one in politics was listening.

The Greatest Generation created an economy that doubled the median wage in less than one generation. The "Silent Generation" that followed them, quietly, without any public discussion of the risks to taxpayers, removed the protections and voices that the public depended on. Rather than crate wealth, they accumulated wealth by "taxing" all Americans with greater risk, higher banking fees (28% credit card interest rates) and finally, with the Great Recession when their greatest gamble, the sub-prime loan, burst. All of those profits were the product of investments by millions of Americans in good government, a condition denied them by the 1% who bent the rules to take all the profits from a doubling of productivity from 1970 to 2000. In return, they gave us credit cards with hig rates, and ATM machines.

Bad government is not a condition of size, it is a condition of leadership. No business would retain the services of employees who let departments fail to respond to the real needs of the customers who pay all the bills and we can no longer afford to "hire" representatives who will not "own" the agencies they manage. Tell us why we should be proud of your work, or go home.

This article is one of a series, "Common Sense" by

Harrison Picot

Independent candidate for congress in Virginia's 10th district

Here and at http://standupvirginia.org/