The Republican National Convention erupted Monday with all the grandiosity of a Las Vegas-style reality show starring the most powerful politicians on earth.
But before the GOP civil war on the floor, strange appearances by Scott Baio and Antonio Sabato Jr., and Melania Trump’s curious speechifying, a news story appeared but generated little attention.
Paul Manafort, campaign manager for presumptive GOP nominee Donald Trump, announced that the party platform would support reinstating the Glass-Steagall Act.
It was a stunning announcement to say the least, the equivalent of Hillary Clinton supporting daily prayer in public schools. Well maybe not that big, but you get the idea.
It puts Republicans in agreement with Democrats on a significant piece of financial regulation.
And while party platforms carry about as much influence as Charlie Sheen preaching abstinence, agreement is huge.
It gives a strong push to Glass-Steagall coming back in some form.
To refresh your memory, the 1933 law created a wall between traditional banking and riskier investment banking practices. But Congress gradually weakened the law and finally repealed it in 1999, opening the door for many insurance-banking combination businesses.
After the 2008 financial crisis, a movement to reinstate the law began. A return of Glass-Steagall would be a blow for some of the biggest names in finance, as they would be forced to split up or sell off big chunks of business.
As expected, some industry observers are weary of continued regulations flowing from Washington.
“Glass-Steagall is dumb politics and dumb economics,” Tony Fratto, managing partner at the consultant Hamilton Place Strategies, told Bloomberg News. “Returning to Glass-Steagall would be destructive and unworkable.”
Not everyone favors reviving the banking regs. House Speaker Paul Ryan, one of the most powerful lawmakers in the legislative game, rejected Glass-Steagall in his reform initiatives.
FYI, the original legislation was named for its authors – Sen. Carter Glass, D-Va., and Rep. Henry B. Steagall, D-Ala.
At 30 years old, Glass purchased and became editor/publisher of the Lynchburg News. He would not enter politics until his 40s, but served in various public offices for nearly 50 years.
Steagall served in the House of Representatives for 28 years, including serving as chairman of the influential Committee on Banking and Currency for virtually the duration of the Great Depression.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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