Glass Steagall prevented banks from using their coffers as a casino to make bets in the stock markets. Banks are able to leverage deposits 30 to one. Once you realize this you can quickly see why allowing banks to bet on Wall Street would be a disaster.

Let’s say you walk into a casino. You walk in with 200 bucks to bet on craps. The casino hands you $6,000 dollars and says “don’t worry you’ve got credit enjoy yourself” Two hours later and several questionable busty women your busted. Nothing. Nada. Zip. Sluggo and his too goons drag you out back and threaten to break your kneecaps if you don’t pay up in 24 hours.

This is the situation that hit Joe Corazine at MF Global. Jamie Diamond ceo of JP Morgan called in his chips, his marker. Suddenly two billion dollars vanished.

What is overlooked is that Banks have been so busy gambling that nobody remembered they were supposed to make loans to small business. Why mess with a 4% rate of return? Well because that’s how America used to grow it’s economy.

This issue alone (and Red China) are the reason America is now in the Greatest Depression. Without capital the vines of industry wilt and die. It is long overdue to restore Glass Steagall but Wall Street (aka Sluggo in the Parkinglot) stands up to Obama and goes “What, ya gotta problem here? Gettoutta here. fuhgettaboutit” but as hard as they tell us to just forget, with labor participation rates the lowest in human history and unemployment past 24%, its hard to forget.