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Repeal of Glass-Steagall: Not a cause, but a multiplier
When the Titanic set sail from Southampton on April 10, 1912, bound for New York, it was called “unsinkable.” This was before that chance encounter in the North Atlantic with a large iceberg. You know how that movie ended.
While the shortage of lifeboats didn’t cause the sinking, this insufficiency after the crash was a factor in the 1,502 deaths.
I was reminded of this recently after reading articles that argued over the role the repeal of the Glass-Steagall Act played in the financial crisis. The Depression-era regulation that separated Main Street banks from Wall Street investment firms had a huge impact on the finance sector.