Ok, corporate donations are not linked to what everyone inside a corporation decides but rather a small set of people whose interest don't necessarily align with the shareholders or the workers at large. Handing disproportionate power to middlemen breeds corruption without the counterbalance of risking large personal fortunes or publicity.
This same argument also disproves the idea of giving personal tax breaks on large incomes as apposed to corporate tax breaks for small businesses. AKA middle management don't create jobs so tax breaks targeting 'job creators' that include them are misnamed.
Edit: The above is a position piece just like those people at the Heritage Foundation are paid to create. There is nothing wrong with suggesting you find credible sources that are not simply spouting propaganda.
"Consider the source" is a perfectly valid heuristic for credibility, which is necessary when counterarguing major political topics like those surrounding Glass-Steagall/Graham-Leach-Bliley. Is HF the most credible source for GP's argument? If so, then that is part of the story.
I didn't provide anything deeper because this has been rehashed many times, and those claiming that G-S is what allowed the crisis have never offered anything of substance in those previous discussions.
But if you insist on more meat, consider (from the original citation [1]):
the evidence so far shows that Gramm-Leach-Bliley has helped soften the blow to taxpayers by allowing commercial banks to take over trouble investment firms. Just look at which organization’s have failed:
Bear Stearns was an investment bank before it was sold to JP Morgan Chase (which includes a commercial bank).
Fannie Mae were Freddie Mac were government sponsored entities before the government bought them.
Lehman Brothers was an investment bank before it want bankrupt.
Merrill Lynch was an investment bank befor it was sold to Bank of America (which is a commercial bank).
AIG is an insurance company with no commercial banking division.
Remember, Glass-Steagal was passed to protect commercial banks from failure by forbidding them from investment bank practices like trading in securities and underwriting stocks and bonds. As you can see above non of the failed institutions are commercial banks that got in trouble through risky investment banking. Instead, it is the commercial banks that are providing some stability to the system by purchasing troubled investment banks. Without Gramm-Leach-Bliley they would not even be allowed to technically do this.
Or from a respected economist:
Many wise people are now recognizing that the repeal of Glass-Steagall was one of the few saving graces of the current crisis. [2]
Most of all, the Act enabled financial diversification and thus it paved the way for a number of mergers. Citigroup became what it is today, for instance, because of the Act. Add Shearson and Primerica to the list. So far in the crisis times the diversification has done considerably more good than harm. Most importantly, GLB made it possible for JP Morgan to buy Bear Stearns and for Bank of America to buy Merrill Lynch. It’s why Wachovia can consider a bid for Morgan Stanley. Wince all you want, but the reality is that we all owe a big thanks to Phil Gramm and others for pushing this legislation. Brad DeLong recognizes this and hail to him. Megan McArdle also exonerates the repeal of Glass-Steagall. [3]
