Democratic Senate candidate Joe Sestak will get campaign help Thursday from Sen. Byron Dorgan (D.,ND), who prophesied problems from the 1999 law repealing barriers between commercial and investment banking. The visit will reinforce the point Sestak has been making about his Republican opponent, former Rep. Pat Toomey, who was an advocate of the change.
In a floor speech Nov. 5, 1999, Dorgan predicted the change would destabilize the American financial system.
“I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930s is true in 2010," Dorgan said then. "We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.”
Sestak and others argue that this legislation allowed banks to grow "too big to fail" and make the kind of risky Wall Street trades, including in mortgage debt, that led to the financial markets crashing in 2008 and triggered the recession.
Toomey voted for the Gramm-Leach-Blilely legislation, as did most of the Democrats then in Congress. Former President Bill Clinton said recently that the law softened the recession's impact because it made financial institutions more flexible.
Dorgan is scheduled to campaign with Sestak at an event about job-training at the Philadelphia Custom Design School of Carpentry & Cabinet Making, 6228 N. Eighth St., at 12:15 p.m.