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| This time, the presidential candidate embraces the label "democratic socialist". |
In their recent post on bank stocks, they note the rapid decline in megabank stocks, with special attention to Goldman Sachs.
The decline in stock prices could be related to the drop in commodity prices, toxic loans and other economic developments.
But it may also be related to the better-than-expected performance of Sen. Bernie Sanders, who has made the case that the financial crisis of 2008 was caused by deregulation of the banking system. He wants to bring back the regulatory provisions of the 1933 Glass-Steagall Act (the deposit insurance part is still in place and the coverage has been super-extended).
Sanders is correct that FDR's feat in 1933 was extraordinary. I have been writing about how FDR's first Treasury Secretary, Will Woodin, calmed the bank panic that faced the incoming administration in early March 1933. Woodin was a Republican and was Chairman or President of two of the 20 companies in the Dow Jones Industrial Average in 1928–American Car & Foundry and American Locomotive. Woodin had a business background. He got behind financial reform and the system that he and FDR put in place in 1933 served the country well for more than half a century. It's a fair argument that we could bring back the basic concept of walling off the insured deposits and making sure that they can't be accessed, especially in an emergency, by risk-seeking investment banks.
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