For more than fifty years following the crash of 1929 Glass-Steagall served as a dike against the ravages of excessive speculation in the financial markets. This set of graphs gives a good visual presentation of the inverted pyramid (Ponzi) effect that deregulation has had on capital markets since the late 1970s:

• 1978, Marquette vs. First of Omaha—allowed banks to export their state usury laws nation-wide, setting off a wave of deregulation as states competed for banking business; resulted in complete elimination of usury rate ceilings in most states
• 1980, Depository Institutions Deregulation and Monetary Control At—more than doubled the level of deposit insurance, while at the same time, completely phasing out interest rate ceilings on deposit accounts
• 1982, Garn-St. Germain Depository Institutions Act—deregulated thrifts almost entirely allowing them to get into commercial lending

1987—As a result of mounting S&L failures following earlier deregulation, the FSLIC deposit insurance fund is declared insolvent and must be bailed out by the government

• 1989, Financial Institutions Reform and Recovery Act—creates the Resolution Trust Corp to resolve failed thrifts
• 1994, Riegle-Neal Interstate Banking and Branching Efficiency Act—eliminated restrictions on interstate banking and branching
• 1996, Fed reinterprets Glass-Steagall—allowed bank holding companies to increase investment banking activities to 25% of revenues

1998—As a result of deregulation having removed all the barriers, Citicorp and Travelers are allowed  to merge and combine their commercial banking, insurance, and investment activities—the stage is set for some really bad behavior

• 1999, Gramm-Leach-Bliley Act—repealed Glass-Steagall all together
•  2000, Commodity Futures Act—the Act  prevents regulation of most OTC derivative contracts, including credit default swaps; growth in derivatives skyrocket

2004—SEC introduces voluntary (???) industry regulation allowing investment banks to hold less capital reserves and increase leverage

2007—Subprime Mortgage Crisis sends shockwaves through the entire financial system

• 2007, Term Auction Facility—Fed sets up a special liquidity facility, that unlike the discount window, makes loans with no public disclosure

2008—Bear Stearns Collapse is a harbinger of worse to come

• 2008, Primary Dealer Facilities—Fed opens the discount window to investment banks accepting a broad range of questionable asset-backed securities as collateral
• 2008, Housing and Economic Recovery Act—props up new subprime borrowers with Federal guarantees

2008—Fannie Mae and Freddie Mac go into conservatorship

2008—Lehman Brothers Collapses

• 2008, Emergency Economic Stabilization Act—increases deposit insurance to $200,000; authorizes Treasury to purchase distressed mortgage-backed securities; injects capital into the banking system
• 2008, Money Market Liquidity Facilities—Fed facilitates purchase of various money market instruments
• 2009, Public-Private Investment Program—Fed subsidizes purchase of toxic assets with government guarantees

…and the beat goes on…