May 18, 2012 - 7:20AM

Multiplying "investigations" by the FBI, Senate Committees, etc. are grandstanding with the JPMorgan Chase derivatives fiasco, but the law Morgan disastrously broke, is the one Congress disastrously repealed in 1999. For the third time in a little over a decade, the completely unregulated London office of a financial institution, whose dangerous size or even existence would have been impossible under Glass-Steagall enforcement, is bringing on financial crisis and bailouts. The first was LTCM in late 1998-early 1999; the second, AIG Financial Products in late 2008; the third, JPMorgan Chase's "chief financial office" now. In each case, commercial bank deposits and loans, or insurance premium revenues, were used to feed huge casino speculations which blew up — completely illegal under Glass-Steagall.

While reports were circulating Thursday that JPMorgan Chase's derivatives loss has already doubled, to near $4 billion, the demand to restore Glass-Steagall continued to spread.

The important St. Louis Post-Dispatch editorial of May 15, "What's Wrong with the Glass-Steagall Act, Anyway?" has been reprinted in McClatchy newspapers around the country.

Former Labor Secretary Robert Reich's blog again today is on bringing back Glass-Steagall, and NPR's "Market Place" has an interview with him from the May 16 program. Reich told the national radio audience, "Let's stop hoping Wall Street will mend itself. And stop pretending the Volcker Rule, with its giant loophole, will be adequate to separate the casino of investment banking from commercial banking's necessary role of taking in savings and lending them out. We need Glass-Steagall back."

Republican Congressional candidate (Rhode Island's First District) Brendan Doherty issued a statement May 16 calling for enactment of a new Glass-Steagall Act.

Senate Democratic candidate Elizabeth Warren is now saying that she will present Congress soon with a petition to reinstate Glass-Steagall, with more than 100,000 signatures. Interviewed by the FireDogLake blog site Thursday, Warren, who had supported enforcement of the "Volcker Rule", was asked whether the Volcker Rule and Glass-Steagall are two ways to get at the same problem. She said, "They aren't the same. Complexity surrounded the implementation of the Volcker rule. JPMorgan Chase is teaching the entire world right now about the consequences of complicated approaches to regulation. If it's true that the Volcker rule can't adequately manage the risks that the largest banks are determine to take on, then the right answer is Glass-Steagall. A modernized Glass-Steagall. Separate commercial banking from Wall Street."