I realize that people don't come to this blog for public policy analysis. But yesterday, while getting my taxes done, it came to my attention that my very intelligent and well-informed accountant didn't know an important piece of history regarding our economic situation. So I thought I'd use a normally blog-post-free Sunday to pass along the info.
Here it is.
In 1933, Congress passed the Glass-Steagall Act, which limited the types of investments commercial banks could make. According to Investopedia, the act's proponents argued that the law was needed because "commercial banks took on too much risk with depositors' money." They believed that these risks led to the Great Depression.
In 1999, legislation introduced by Republican Phil Gramm and referred to as Gramm-Leach-Bliley repealed those provisions of Glass-Steagall.