Of the myriad policy decisions that have brought us to our current precipice – from the signing of the North Atlantic Free Trade Agreement (NAFTA) to the invasion of Iraq and the gerrymandering of House districts across the country – few have proven as consequential as the demise of Glass-Steagall.
Signed into law as the U.S.A. Banking Act of 1933 the legislation had been crucial to safeguarding the financial industry in the wake of the Great Depression.
But with its repeal in 1999 the barriers separating commercial and investment banking collapsed – creating the preconditions for an economic crisis from whose shadow we have yet to emerge.
Carmen Segarra might have predicted as much.
As an employee at the Federal Reserve in 2011 – three years after the dissolution of Lehman Brothers – she witnessed the results of this deregulation firsthand. In her new book, ‘Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street’ she chronicles the recklessness of institutions like Goldman Sachs and the stunning lengths the United States government went to to accommodate them – even as they authored one of the worst crashes in our nation’s history.
‘They didn’t want to hear what I had to say’ she tells Robert Scheer in the latest installment of ‘Scheer Intelligence’.
‘And so I think what we have in terms of this story is really not just a failure of the banks and the regulators but also a failure of our prosecutors.
I mean – a lot of the statutes that could be used—criminal statutes even – that could be used to hold these executives accountable are not being used and they have not expired – we could have prosecutors holding these people accountable’.