One of the major causes of the current economic crises is the repeal of most of the Glass-Steagall Act of 1933. This law was passed to fix the problems that caused the Great Depression. Since at least the 1980s, the banking industry had wanted the act to be repealed in favor of a more lucrative law that would allow them to merge with investment banks and insurance companies. In 1999 the Gramm-Leach-Bliley Act also known as the Financial Services Modernization Act of 1999 was passed and did just that. Many economists believe that repeal of Glass-Steagall was directly responsible for a major part of the financial crises we currently live with.
There is a new bill in Congress sponsored by Senator Christopher Dodd (D) Connecticut, which will bring back some of the regulations that are needed to get a handle on these banks that are "too big to fail." However, the bill does not do enough to prevent another disaster like the most recent one. Banks are so big now that they are roughly 60% of GDP. This is up from less than 20% in 1995. Taxpayers cannot be responsible for bailing out these monstrous behemoths. There has to be some way to break them up and make them much smaller so they can be controlled. As is, they have way too much political power and are way too big. As shown in this press release, Senator Ted Kaufman has an idea on how to break up the gigantic banks.
We as responsible citizens need to contact our representatives and let our voices be heard. We do not want to bail out the banks ever again. The banks need to be smaller so they don't become "too big to fail."