Ron Paul's 'No' vote on Glass-Steagall repeal

[Intoxiklown]

"Why did Ron Paul lie when he said he voted against the repeal of the Glass-Steagall Act in 1999? Ron Paul voted NO VOTE on Nov 4, 1999. "


I keep getting asked this on other forums. Granted, if this is the best they can do, lol. However, I prefer to debate with facts and reasoning. Can anyone elaborate on something I'm missing. My "google kung fu" appears weak on this.

[kylejack]

Maybe this?


http://www.youtube.com/watch?v=eIC8E9Q2pTs

He wants banks to be able to do business as they please, but repealing Glass Steagal gave investment banks access to the FDIC as lender of last resort. And thus they stole a bunch of money from the taxpayers.

In short, Glass Steagal said that only "normal" banks (banks that take deposits, make loans, etc) could have access to the Fed window if their investments went bad. Investment banks (banks which serve primary purpose of gambling on Wall Street investments) could not come to the government. Glass Steagal protected the taxpayer from bailing out casino capitalism gambling.

[revgen]

nvm

[Intoxiklown]

Yeah, I've seen this. But that's not the line of questioning I keep getting.

The "slam" they keep using is, he said he voted against it, but the record shows him abstaining on his vote. Is there some "political judo" he was employing? Again, I consider this so ungodly trivial it's not even funny. More so, if this is the best they can do to discredit him. However, I'm just trying to understand.

[kylejack]

Yeah, I've seen this. But that's not the line of questioning I keep getting.

The "slam" they keep using is, he said he voted against it, but the record shows him abstaining on his vote. Is there some "political judo" he was employing? Again, I consider this so ungodly trivial it's not even funny. More so, if this is the best they can do to discredit him. However, I'm just trying to understand.
The House voted on a bill, the Senate voted on a different bill.

Then there was a conference to reconcile the bills and then each house had to vote on agreeing to the conference report. Dr. No voted No. http://clerk.house.gov/evs/1999/roll276.xml

It's possible Paul wasn't in DC when the original House version was passed, but he may have knew that the two different versions would require a conference report vote.

[Harald]

e-mail his congressional office. Pity they changed their website and I cannot get an archive of his speeches prior to 2000.
Here are the excerpts from congressional record where Ron Paul talks about the repeal.

"The negative aspects of this bill outweigh the benefits" -- tells me he was opposing the bill, but was unavailable for the final vote.

http://reason.com/blog/2008/10/21/ron-paul-in-1999-on-the-curren

"today we are considering a bill aimed at modernizing the financial services industry through deregulation. It is a worthy goal which I support. However, this bill falls short of that goal. The negative aspects of this bill outweigh the benefits....
The growth in money and credit has outpaced both savings and economic growth. These inflationary pressures have been concentrated in asset prices, not consumer price inflation--keeping monetary policy too easy. This increase in asset prices has fueled domestic borrowing and spending.
Government policy and the increase in securitization are largely responsible for this bubble. In addition to loose monetary policies by the Federal Reserve, government-sponsored enterprises Fannie Mae and Freddie Mac have contributed to the problem. The fourfold increases in their balance sheets from 1997 to 1998 boosted new home borrowings to more than $1.5 trillion in 1998, two-thirds of which were refinances which put an extra $15,000 in the pockets of consumers on average--and reduce risk for individual institutions while increasing risk for the system as a whole.
The rapidity and severity of changes in economic conditions can affect prospects for individual institutions more greatly than that of the overall economy. The Long Term Capital Management hedge fund is a prime example. New companies start and others fail every day. What is troubling with the hedge fund bailout was the governmental response and the increase in moral hazard.
This increased indication of the government's eagerness to bail out highly-leveraged, risky and largely unregulated financial institutions bodes ill for the post S. 900 future as far as limiting taxpayer liability is concerned. LTCM isn't even registered in the United States but the Cayman Islands!
...My main reasons for voting against this bill are the expansion of the taxpayer liability and the introduction of even more regulations. The entire multi-hundred page S. 900 that reregulates rather than deregulates the financial sector could be replaced with a simple one-page bill.
"

[Carole]

Hope this helps. :)

Ron Paul explains why he voted against repeal of Glass-Steagall
http://www.youtube.com/watch?v=eIC8E9Q2pTs

Uploaded by evmazu on Oct 21, 2011
Glass-Steagall separated (supposedly) banks from investment banks. When Glass-Steagall was repealed, it allowed investment banks to pass the losses onto the taxpayer since the federal government would provide FDIC insurance and because the Federal Reserve would serve as "the lender of last result" and bail out these hybrid banks.

In a free market, if banks make risks, they have to take the losses instead of passing them onto the taxpayer.

In a free market, banks and commercial banks could merge, but if they take big losses and are unable to return customers deposits on demand, they have committed an act of fraud and government's role is to punish the individuals responsible, not bail them out. Such a system means banks would act very conservatively because it's better to stay in business than in jail. But under the current system where government's role is a banker's backstop, the best way to rob a bank is to own one.

http://www.nolanchart.com/article8231-ron-paul-2012-the-stars-are-finally-in-...
http://www.youtube.com/watch?v=eIC8E9Q2pTs
~~~~~~~~~~~~~~~~~~~~~~~~
Ron Paul-Change the Philosophy of Government http://www.ronpaul.com/tag/glass-steagall-act/
41 Responses
By RonPaul.com on May 26, 2010 Ron Paul appeared on The Mangru Report and talked about the financial crisis, the Financial Reform Bill, Glass-Steagall Act, a potential VAT tax, term limits, and… his dream of becoming a singer! Show: The Mangru Report Original Air Date: 05/22/2010 Date of Interview: 05/13/2010 Rush Transcript This is a rush transcript. Can you help us [...] http://www.ronpaul.com/tag/glass-steagall-act/
Meanwhile here's Ron Paul's view on Glass-Steagall:
http://blog.nj.com/njv_paul_mulshine/2011/10/post_151.html


Dan Mangru: Now some experts point to the repeal the Glass-Steagal act, which separated banking from stock trading and is one of the precursors of the bank crisis of 2008, where banks were allowed to take excessive risks. Would you be in favor of bringing back this regulation?

Ron Paul: You know it’s interesting, I voted on the Glass-Steagal change and I voted against it. The free market though would not have a Glass-Steagal. Banks could do what they want and they have to suffer the consequence. The reason I voted against it, that bill did have some bad parts to it, but one of the reasons I argued against it, repealing it, it was that it was going to put a greater burden on the banks and the taxpayer was at risk, at greater risk through the FDIC and other insurance programs of the government. So I saw that as a greater burden on the taxpayer and voted against it. But I’m for the free market and free market banking, therefore you would have no rules against banks being involved in commercial and investment banking.

[Intoxiklown]

Harald....you're a rock star!

*Edit*

OMG Carole....you just joined Harald's band!

[revgen]

He voted against the first version that was passed in the House on July 30, 1999.

The 2nd version on November 4, 1999 was a Not Voting.

My only guess is that Ron wasn't there that day.

[kylejack]

Wow, repeal of Glass Steagal passed 343 - 86. Ron Paul again is proven correct in a stark minority. Only 15 other Republicans voted with him.

[jmdrake]

Good information! Thanks. It's important to realize that sometimes half-baked deregulation is worse than the regulations themselves. Repealing Glass Steigal created a moral hazard just like Fannie and Freddie created a moral hazard.

[kylejack]

Ah I see, here is the full legislative history. http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act#Legislative _history

Yeah, final passage passed in a 362 - 57 landslide with a No Vote from Paul.

[kylejack]

From Wikipedia:
Economists Robert Ekelund and Mark Thornton have also criticized the Act as contributing to the crisis. They state that "in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance" the Financial Services Modernization Act would have made "perfect sense" as a legitimate act of deregulation, but under the present fiat monetary system it "amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly."[23]
BINGO.

[Intoxiklown]

And that's the knockout punch I needed...

=)

[Travlyr]

Good information! Thanks. It's important to realize that sometimes half-baked deregulation is worse than the regulations themselves. Repealing Glass Steigal created a moral hazard just like Fannie and Freddie created a moral hazard.
And both of those moral hazards are created by elastic money.

[iamse7en]

+1 to this thread.

[sailingaway]

+1 to this thread.

Yeah, but if you are going to quote someone saying Ron is a liar, hot topics might be a better place to start. Otherwise, until it is proven false, the accusation is just more widely published.

[Intoxiklown]

Yeah, but if you are going to quote someone saying Ron is a liar, hot topics might be a better place to start. Otherwise, until it is proven false, the accusation is just more widely published.

No problem, and thanks for the correct place to ask further questions along this line.

[jmdrake]

And both of those moral hazards are created by elastic money.

I totally agree. The elastic money is the root of the problem. The conduits the feds use to spread it around are the leaves.

[Travlyr]

I totally agree. The elastic money is the root of the problem. The conduits the feds use to spread it around are the leaves.
Well said. If we could get everyone to understand why elastic money is so bad, then we could solve this system of theft.

[StilesBC]

Good points here. This should certainly be used as evidence that RP and libertarians don't just believe in cutting regulation for ideology's sake. The systems of malincentives and moral hazard need to be simultaneously eliminated with regulation to ensure a free market outcome.

[unknown]

The House voted on a bill, the Senate voted on a different bill.

Then there was a conference to reconcile the bills and then each house had to vote on agreeing to the conference report. Dr. No voted No. http://clerk.house.gov/evs/1999/roll276.xml

It's possible Paul wasn't in DC when the original House version was passed, but he may have knew that the two different versions would require a conference report vote.

This answer's the OP's question.

Seems that they are accusing RP of lying as opposed to looking for a justification.

If RP said he did it, he did it. If he says he's going to do it, he's going to do it.

[kylejack]

I wasn't exactly correct, apparently that wasn't final passage. But Ron Paul did get in a vote against it at one point during the process.

[sailingaway]

I wasn't exactly correct, apparently that wasn't final passage. But Ron Paul did get in a vote against it at one point during the process.

If he is on the overwhelmingly going to lose side of a vote, sometimes he misses a vote for other obligations. So at part of the process he may not have been there, but when he was he voted against repeal.

[cdc482]

http://www.techdirt.com/articles/20111211/01563717032/96-congressmen-agree-bad-legislation-is-easier-to-craft-secret.shtml
EDIT: Not directly relevant, but interesting

[doctor jones]

Ah I see, here is the full legislative history. http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act#Legislative _history

Yeah, final passage passed in a 362 - 57 landslide with a No Vote from Paul.

362-57 vote shows Dr. Paul as "Not Voting"

http://clerk.house.gov/evs/1999/roll570.xml

[kylejack]

Apologies, by No Vote I meant he didn't vote.

[wgadget]

Super-mega bump for RON PAUL'S PRESCIENCE AND ECONOMIC PRUDENCE. (COMPARED TO THE OTHER MORONS STILL RUNNING FOR PRESIDENT)

[sailingaway]

Yeah, I've seen this. But that's not the line of questioning I keep getting.

The "slam" they keep using is, he said he voted against it, but the record shows him abstaining on his vote. Is there some "political judo" he was employing? Again, I consider this so ungodly trivial it's not even funny. More so, if this is the best they can do to discredit him. However, I'm just trying to understand.

He came out in opposition to repealing it consistently and he voted against it. Many bills have multiple votes. Many sites show 'abstaining' when it is a no vote, you have to go to the CLERK report to see. the third party sites often don't have a 'not voting' option and call it abstaining.

[TheGrinch]

No vote is the same as voting NO... It's not like you need a majority against it. You need a majority for it, and so a no-vote is essentially the same as voting against it, minus the emphasis.

In fact, you could call it fiscally responsible to not go to capital hill just to do what you can do by abstaining your vote. It makes no difference besides perception (which is why he still shows up to vote against some of the more outrageous bills).

[wgadget]

Read somewhere (probably here on this thread) that he voted no on an earlier version of the bill, and everything he's said and written goes against the repeal. He knew it would pass in a landslide (which it did) and may have been out of town for the final vote.

[wgadget]

I found many articles which say that Newt Gingrich was running around Congress trying to get people to vote for it; however, now he thinks it was a mistake.

Moron.

Can't find anything re: Romney on the topic. I'm sure he made billions with the legislation...