Progress Illinois

Last week, we noted a rather somber anniversary: Ten years had passed since Congress and the Clinton White House enacted legislation overtturning the Glass-Steagall Act.  By dismanting this Depression-era financial regulation (which segregated commercial banks and investment banks), the new law helped paved the way for the wild derivatives trading among too-big-too-fail Wall Street Banks.  We further pointed out that various respected financial experts have proposed reinstating some form of Glass-Steagall as a response to the financial crisis. 

Now it looks like such a bill doing might surface soon in the U.S. House.  From an op-ed published today by Rep. John Conyers (D-MI):

The Glass-Steagall Act had a simple premise: America’s banking sectors and investment houses need to remain separate to prevent banks from gambling on the stock market with our savings. President Franklin Roosevelt knew that banks, like other institutions, could not be trusted to police themselves. After witnessing the widespread failure of financial institutions in the Great Depression. he recognized a firewall was needed between the casino on Wall Street and the private investment engines of Main Street

Unfortunately, we forgot this lesson. Without Glass-Steagall serving as a critical check on the power of banks, the floodgates of speculation were opened. The banks leveraged personal savings accounts to trade in exotic securities and assets. Banks, insurance companies, and investment firms merged at an astounding pace. No longer content to simply finance home mortgages, these new hybrids began creating and selling securities based off of the speculative value of shaky mortgages. The banks took on more risk because risk was profitable. No one paid much attention to what would happen when the speculation bubble burst. [...]

President Barack Obama’s chief outside economic advisor and former Federal Reserve Chairman Paul Volcker, Nobel Prize-winning economist Joseph Stiglitz, and Nouriel Roubini, the economist who correctly predicted the financial crash, all agree that some form of the Glass-Steagall firewall must be restored if the architecture of our financial system is to be sound. That is why, in the coming weeks, I will introduce a modernized and updated version of the Glass-Steagall Act.

Once Conyers introduces his bill, we'll be watching carefully to see which members of the Illinois congressional delegation sign on.

This weeks mark ten years since the enactment of the Gramm-Leach-Bliley Financial Services Modernization Act.  This piece of legislation repealed a Depression-era law known as Glass-Steagall, which segregated commercial and investment banks. By breaking down that wall, huge financial institutions were able to invest heavily in exotic "derivatives" that put the whole financial system -- not just their investors -- in peril. 

We all know how that story ended.

Some in Congress saw it coming. At the time, Sen. Byron Dorgan (D-ND) warned, "I think we will in 10 years' time look back and say we should not have done this."  In a Washington Monthly op-ed, he foresaw a "financial conflagration" that would "make us nostalgic for the days of the $500 billion savings-and-loan collapse."

Dorgan wasn't alone.  In fact, as we noted last year, nine members of Illinois' congressional delegation were among the 57 House members to vote against Gramm-Leach-Billey.  Those still in office include Reps. Jan Schakowsky, Bobby Rush, Jesse Jackson Jr., Luis Gutierrez, and Jerry Costello.  On this unfortunate anniversary, we once again give them a tip of the hat.

It's also worth noting that some of President Obama's own economic advisers support restoring Glass-Steagall.  Former Federal Reserve Paul Volcker, for example:

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Last week at this time, thousands of outraged taxpayers and activists were taking to the streets to protest the banking industry's destruction of the economy and obstruction of much-needed financial regulatory reform.  Whether you missed the action or were in the thick of it, be sure to check out this great video recapping the Showdown in Chicago (produced by Heather Stone for the SEIU Illinois State Council, which sponsors this website):

Those interested in learning more about the Showdown should check out this wrap-up of our three days of coverage.

A good deal of our coverage of the Showdown in Chicago has focused on the folks behind the microphones -- nation figures like Dick Durbin, Anna Burger, Richard Trumka, Andy Stern, and Sheila Bair, as well as local leaders such as Tom Balanoff, Rev. Tony Pierce, and Denise Dixon.  Now that the actions have all come to an end, what about the everyday folks on the ground?  The ones who traveled from Iowa or New York or Springfield or the South Side to make their voice heard.  The following video gives a sense of why they came to Chicago and what they've been saying over the past three days:

If you're just learning about the Showdown, you can find all of our coverage -- including lots and lots of video -- here. 

Earlier we covered the large march that started the third and final day of the Showdown in Chicago (catch up on days one and two here).  After making their way across the Chicago River, the thousands of protestors congregated in front of the Sheraton Hotel (home to the American Bankers Association annual conference), where they heard from an array of speakers, some locally-based and some from the national stage.  Among them were Change to Win chair Anna Burger and Tom Balanoff, president of the SEIU Illinois State Council (which sponsors this website).  "Did [the bankers] build anything? Create anything? Do anything?" Burger asked the crowd, which repeatedly responded "No!" Watch some excerpts from their remarks:

We'll have more video from the rally as the day goes on.  Be sure to check back.

3:06 p.m.: Here's a taste of the speech given by Angenita Tanner, a child care provider and member of SEIU Healthcare Illinois/Indiana.  "America bailed out the banks," she told the crowd. "But the banks aren't bailing out the people!"  Watch it: 

Here's more footage, courtesy of SEIU and National People's Action:

4:15 p.m.: And here is AFL-CIO President Richard Trumka addressing the protestors:

Finally, Action Now's Denise Dixon told the crowd that the bankers "had the nerve to have a party in Chicago and didn't invite us." "We came anyway!" a marcher yelled back. Watch it:

Today marks the final day of the Showdown in Chicago and it began with a huge march across the Chicago River to the downtown Sheraton, home to the American Bankers Association's annual conference.  As of 11 a.m., thousands of participants were streaming up to the hotel, where they will hear from a variety of speakers, including AFL-CIO president Richard Trumka and Change to Win chair Anna Burger. 

We'll have photos, video, and more updates from the event as the day goes on.   

11:35 a.m.: Here's the view of the Sheraton rally from above:

11:45 p.m.: Chicago laborer Marcus Moore tells us why he's taking part in today's march, saying that the economic problems facing his community "started at the top and it trickles down.  And it's affecting us pretty hard.  And I think the banks are to blame."  Watch it:

12:00 p.m: Before the marchers took off for the Sheraton, SEIU International President Andy Stern addressed the crowd, saying "If anyone is confused about why we're here, let me tell you: It's because we love our country."  Watch it:

Here are some more images from the march:

After actions at the local headquarters of Wall Street giants Goldman Sachs and Wells Fargo, the Showdown in Chicagocontinued this afternoon outside the downtown Sheraton, where theAmerican Bankers Association is holding its annual conference. At theevent, we talked to numerous Showdown participants, many of whom arelosing their homes or their savings.  Their stories illuminated thedeep suffering caused by the banking industry's drive to put profitsabove all else.

After trying for more than a year to have her mortgage modified soher family could remain in their Springfield home, Trenda Kennedy toldus that she is outraged and disgusted atBank of America's decision to reject her request while spendingmillions to lobby Congress.  Indeed, as more and more Americans faceforeclosure, the industry continues to devote staggering amounts ofmoney to block regulatory reforms on Capitol Hill.  So far in 2009, thenation's largest commercial banks have spent upwards of $27 million onlobbying expenses, the Center for Responsive Politics reports.  That's in addition to the $50 million they spent in 2008 -- the same year the industry collectively cashed $700 billion bailout check.

"That $27.6 million could have kept so many people in their homes,"Kennedy told us.  "The banks, my bank, Bank of America, got $45 billionin bailout money. What's a $100,000 mortgage to them? It's a drop inthe bucket." Watch her call on Congress to pass Illinois' own Sen. DickDurbin's cramdown legislation to "force the banks to work with people":

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The Showdown in Chicago continues ... Via SEIU and National People's Action, here's some great video of a surprise rally that followed the Goldman Sachs protest we highlighted earlier.  Many of those same demonstrators headed over to Wells Fargo's office building and gathered in the lobby, chanting: "Bailouts? No thanks! Bust up big banks!."  When security finally escorted them from the premises, the crowd yelled in unison, "We'll be back!  We'll be back!" Watch it:

During the subprime mortgage boom that led to the financial crisis, Wells Fargo was easily one of the worst actors.  In recent months, several lawsuits filed across the country (including here in Illinois) have alleged that the bank targeted minority homeowners for high-interest mortgages while offering cheaper deals to white customers. Moreover, local unions have spent much of this year fighting Wells Fargo's efforts to cut off credit to companies like Hartmarx and Quad City Die Casting.  In fact, the United Electrical Workers (who represent the Quad City employees) were on hand in Chicago today and can be seen briefly in the video above.

In other Showdown news, be sure to read the Nation's Esther Kaplan on the first evening of action.

This morning marked the second day of the Showdown in Chicago.  It started with a speech by Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair, who strongly expressed her support for the formation of a Consumer Financial Protection Agency (she is also scheduled to address the American Bankers Association conference today).   "I don't know how anyone can say we've done a good job protecting consumers in financial services," Bair said.  "So we need this new agency."  Watch some clips from her appearance, in which she also declared, "No more bailouts!":

Later in the morning, hundreds of protestors headed over to 71 S. Wacker, the Chicago headquarters of Goldman Sachs -- by far the most powerful bank in the country.  Below is some video from that racuous action:

Also, here's the fiery conclusion of Rev. Tony Pierce's speech at yesterday's event (Pierce is the vice president of the Central Illinois Organizing Project):

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Yesterday marked the kick-off of the Showdown in Chicago, three days of actions countering the American Bankers Association's annual conference here in the Windy City.  Nearly a thousand activists and mobilized taxpayers from across the state and country arrived in buses and streamed into the downtown Hyatt where a string of speakers fired up the crowd.  One of them was Larry Ginter of the Iowa Citizens for Community Improvement, who asked the crowd to show how they've been affected by the banking industry's destructive policies.  Watch it: 

Following Ginter was Tom Balanoff, president of the SEIU Illinois State Council (which sponsors this website): 

Later, Sen. Dick Durbin took the podium, where he told the story of Chicagoan Nettie McGee: 

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