Thanks for your reply! I appreciate it!
A couple thoughts:
I agree with your first paragraph completely. My small, local, privately owned bank does things you can't imagine a BofA doing. I had to interviewed and provide years of tax records just to get a minuscule overdraft line. You need the bankers to have their hides on the line.
My personal preference would be that just because consumers act stupidly that it doesn't mean government should absolve their risk. Glass-steagal established FDIC which did this. It's true that the banks did stupid things before hand, but the depression-era runs and FRB failures could've been the tough medicine that educated the consumer about the risk of banking. The generational knowledge that you could lose your money in banking could've changed the world for good.
And, I'm no economic historian, but I think it's a bit generous to credit Glass-steagal as allowing for the greatest expansion of the middle-class. One could guess that a risk-informed banking consumer would've achieved all the same.
This is besides there likely being dozens of other contributing factors to middle-class growth, banking legislation a minor one.
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