April 20—A draft law was introduced April 19 into the U.S. House of Representatives for re-regulating out-of-control financial entities, titled “The Return to Prudent Banking Act of 2023,” which is now a pivot point for a global shift toward a new economic architecture, to serve development, not speculation and collapse. In doing this, the bill at the same time is an initiative toward a new world security architecture, to provide for the common benefit of all nations, and bring an end to the economic and military confrontations, now at the point of risking nuclear war.
The bill, which awaits an HR number, will restore the ‘Glass-Steagall Act,’ which in 1933 separated and insured sound commercial lending, from speculative financial activity. It worked for 66 years until its repeal in 1999. Other nations likewise had implemented banking regulation on the Glass-Steagall model.
The principal sponsor of the “Prudent Banking” bill, Rep. Marcy Kaptur (D-Ohio), described her legislation in a statement yesterday, as a measure which will “re-instate essential provisions of the Glass-Steagall Act, or the Banking Act of 1933, which had provided an unprecedented half-century of economic stability…[it will] restore the separation of commercial and investment banking.” She said that, “Wall Street has proven that it cannot control itself, and it is only a matter of time before it steers America into the next financial crisis. It cannot be any clearer that the time for systemic reform is now, which is why I am introducing the Return to Prudent Banking Act to do just that.”
The 1999 repeal of Glass-Steagall in the U.S. marked the advent of all kinds of deregulated financial practices, speculation and debt-bubbles, leading inevitably to the 2007-2009 crisis. When Glass Steagall was not restored at that time, the bail-outs and liquidity pumping that followed, created an “everything bubble,” which is now bursting. The recent bank failures from California to Switzerland, are just the beginning of the crisis.
Mobilize Support
The critical element now is for the widest U.S. and international support for passage of Glass- Steagall re-instatement, and for discussion of companion measures to boost physical production short and long term, to the levels of productivity and output—in food, water, power, health care—required as the platform for a thriving world.
Internationally, the Schiller Institute has promoted dialogue on these objectives, especially since the issuance in November 2022 of a discussion document, “Ten Principles of a New Development and Security Architecture,” by Helga Zepp-LaRouche, the Institute’s founder and leader. Point Five on “The international financial system must be reorganized” cites the “Four Laws” for a sound economy issued (2014) by economist-statesman Lyndon LaRouche, whose first “Law” was to enact Glass-Steagall banking regulation.
The Schiller Institute has held a series of international conferences (online,) of which the latest was April 15-16, involving over 1,500 participants, from 35 nations, and on its April 16 Panel entitled, “End the Casino Economy,” the necessity of Glass-Steagall was identified. The two-day conference is archived, “Without the Development of All Nations, There Can Be No Lasting Peace for the Planet.” (The transcript of the “End the Casino Economy” will be available also in the April 21, 2023 weekly EIR, on larouchepub.com)
One special companion initiative raised on the April 16 panel, was that the President of Mexico will host an emergency heads-of-state conference on the food supply crisis May 6-7 in Cancun, toward multi-nation collaboration on solving the problems of farming, food shortages, and hyperinflation.
Rep. Kaptur’s statement about her bill notes in particular, “The legislation has been endorsed by the Schiller Institute and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).” There is also widespread support in the U.S. farmbelt. For example, in November 2022, the Kansas Cattlemen’s Association convention passed a resolution calling on Congress to re-institute Glass-Steagall.
End the War Economy
Now is the opportunity to act, not to complain! This goes for Americans fed up with the war economy, the lies, and black-out. And goes for those around the world looking on with horror at how insane the U.S. leadership has been for years. The new move to re-instate Glass Steagall is a sign of sanity and morality. Let’s go for it.
Mobilize for action to re-instate Glass-Steagall, and for all the infrastructure-building, and agro-industrial, health care, education, science development that goes along with it. In the U.S. we have 435 Congressional districts to put this on the agenda to make it happen in Washington.
Internationally, the new Glass-Steagall bill reinforces the call for an “International Emergency Conference to Reorganize the Bankrupt Financial System,” a proposal issued by Helga Zepp-LaRouche, on March 14, within hours of the run on the Silicon Valley Bank in the U.S.
Be sure to attend—and spread the word—on the April 22 Town Hall event in Manhattan (1 to 5 pm EST) sponsored by the Diane Sare for US Senate campaign in New York, where Sare has made the reinstitution of Glass-Steagall a pillar of her political intervention. The event to be held in-person and streamed live online, is titled, “Putting Away Childish Things: America in a World Without War.”
Sare’s 13 guest speakers and musicians—whose appearance does not indicate endorsement of a particular candidacy, but indicates commitment to end the war regime, and to bring the U.S. into participating in a “new paradigm of relations among sovereign states” for the common good and respect of all—include: Helga Zepp-LaRouche,Tara Reade, Scott Ritter, Janice Kortkamp, Larry Sharpe, Nick Brana, Dennis Speed, Jose Vega, Cade Levinson, and Classical musicians Claire Stadtmueller, William Hicks, Alex Guerrero, and Michelle Erin.
People make policies. If they are bad, people can change them. Sare advises in her Town Hall invitation, “As Lyndon LaRouche once said, in an echo of Gottfried Wilhelm Leibniz, ‘God would not create a world in which a solution could not be discovered for the problems facing us.’ I agree. I also think we are running out of time.”
