‘21st Century Glass-Steagall’ Means Whatever You Want It To, Unless You Want It To Mean Glass-Steagall
Mnuchin’s response at times approached the cosmic incomprehensibility of a Buddhist koan:
There actually wasn’t a reversal. The Republican platform did have Glass-Steagall. We, during the campaign . . . specifically came out and said we do support a 21st Century Glass-Steagall, which is – that means that there are aspects of it that we think may make sense. But we never said before that we supported a full separation of banks and investment banking, if we—
Here Warren interjected: “There are aspects of Glass-Steagall you support, but not breaking up the banks and separating commercial banking from investment banking? What do you think Glass-Steagall was if that’s not right at the heart of it?”
The exchange is worth quoting in bulk:
MNUCHIN: Again, I’m well aware of what Glass-Steagall was. As you may know the original concern about Glass-Steagall was about conflicts, not about credit risk. And if we had supported a full Glass-Steagall we would have said at the time that we believed in Glass-Steagall and not a 21st Century Glass-Steagall. We were very clear in differentiating it. I have realized and I had not realized that your bill was named the 21st century Glass-Steagall—
WARREN: And it has been for three years now.
MNUCHIN: I apologize that I was not aware of that, so—
WARREN: I still haven’t heard the answer to my question. What do you think Glass-Steagall was if it wasn’t separating commercial banking from investment banking?
MNUCHIN: Again, the fundamental part of Glass-Steagall was, as you’ve just outlined, the separation of investment banking from commercial banking because people were concerned about conflicts—Again there’s some back-and-forth as Warren takes on the look of someone watching a gory athletic injury in slo-mo. “This is like something straight out of George Orwell,” she says.
.. Yet she takes another crack at it. Again, worth quoting in full:
WARREN: I have to try this one more time. What does it mean to be in favor of 21st Century Glass-Steagall if it does not mean breaking apart these two functions in banking?
MNUCHIN: You know what, I’d be more than happy to come and see you and follow up—
WARREN: Just tell me what it means!
MNUCHIN: Had we – we never came out and said separate banks from investment—
WARREN: Just tell me what 21st Century Glass-Steagall means if it doesn’t mean breaking apart those two functions. It’s an easy question – or an impossible question.
MNUCHIN: It’s actually a complicated question because there’s many aspects of it, OK? The simple answer, which we don’t support, is breaking up banks from investment banks. We think that would be a huge mistake. But again, I’m more than happy to listen to your ideas on it. You obviously have strong views, and I’d be happy to follow up and listen to you.
WARREN: This is just bizarre, the idea that you could say we are in favor of Glass-Steagall but not breaking up the banks.
MNUCHIN: We never said we were in favor of Glass-Steagall, we said we were in favor of a 21st Century Glass-Steagall. It couldn’t be clearer!There you have it! As we have long held, the Trump administration’s “New Modern Twenty-First-Century Glass-Steagall” is just a vacuous string of mouth-sounds with no bearing on anything but the ability of Gary Cohn and Mnuchin to make it through an interview without sounding like a moron.