The Strident Centrist Blog

The Glass-Stegall Acts were passed in the 1930s in hopes of guarding against the kind of financial excesses that led to the Great Depression, and one of their key features was to make it illegal for an individual firm to do business in both commercial banking and the securities business. John S. Reed, who as the CEO of Citicorp throughout the 1990s, was in that position when this wall was demolished by the passage of the Gramm-Leach-Bliley Act of 1999. Reed, who thus has both before and after perspectives, has come out in favor of rebuilding that barrier:

As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I would agree with Paul A. Volcker (and also Mervyn King, governor of the Bank of England) that some kind of separation between institutions that deal primarily in the capital markets and those involved in more traditional deposit-taking and working-capital finance makes sense.

This, in conjunction with more demanding capital requirements, would go a long way toward building a more robust financial sector.

h/t Yves @ Naked Capitalism

In late 2008 the National Intelligence Council prepared a report for the incoming Obama administration entitled Global Trends 2025 that forecast among other things that the United States would gradually lose its preeminence by the end of this first quarter of the 21st century. Michael Klare, the author of Rising Powers, Shrinking Planet: The New Geopolitics of Energy that was published earlier this year, writing at Tom Dispatch asserts that “As a result of the mammoth economic losses suffered by the United States over the past year and China’s stunning economic recovery, the global power shift the report predicted has accelerated. For all practical purposes, 2025 is here already.”

No one seems to be saying this out loud — yet — but let’s put it bluntly: less than a year into the 15-year span of Global Trends 2025, the days of America’s unquestioned global dominance have come to an end. It may take a decade or two (or three) before historians will be able to look back and say with assurance, “That was the moment when the United States ceased to be the planet’s preeminent power and was forced to behave like another major player in a world of many competing great powers.” The indications of this great transition, however, are there for those who care to look.

Klare goes on to cite six recent news items as bellwethers supporting his case, and he sums it all up as follows:

The question remains: How much longer will Washington feel that Americans can afford to subsidize a global role that includes garrisoning much of the planet and fighting distant wars in the name of global security, when the American economy is losing so much ground to its competitors? This is the dilemma President Obama and his advisers must confront in the altered world of 2025.

The observant among you may have noticed that a small image is now visible to the immediate left of the URL window at the top of your browser. The graphic is called a favicon. However it’s so small that you may be wondering what it is. So here’s a blown up version:

It illustrates Texan Jim Hightower’s famous comment that “There’s nothing in the middle of the road except yellow stripes and dead armadillos.” It seems appropriate for a blog named “The Strident Centrist”, even if the centrist in question is more of a recovering one and not from Texas.