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In a speech on the Floor of the House of Representatives in 1999, Congressman John D. Dingell of Michigan’s 15th District warned against repealing the Glass-Steagall Act of 1933. Glass-Steagall prohibited banks from engaging in non-banking business. Its repeal allowed banks to get into the insurance, investment, real estate and other markets.
He argued that repealing the law would allow banks to become “too big to fail,” which would cause instability in financial system. His prediction was routinely ignored, resulting in Congress repealing the law. The repeal led to the tragic consequences of the 2008 financial crisis from which the US and the world are still suffering.
Prescient? I think so.
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