The nation's largest banks still pose a dire threat to the economy, according to MIT professor Simon Johnson, who appeared on MSNBC's "Morning Joe" on Tuesday.
Johnson, the co-author of the forthcoming "13 Bankers: The Wall Street Takeover And The Next Financial Meltdown," former IMF chief economist and HuffPost contributing editor, said that, even more than a year after the financial crisis, the banking sector is undiminished.
"We don't need these particular banks and we definitely don't need these bankers. Remember they managed their way into an enormous crisis that cost us trillions of dollars. And yet we kept every one of them in their jobs, we kept their board of directors, and they got to keep heir bonuses, their pensions, their empires. In fact, they're bigger now than they were before and they're more powerful now than they were before the crisis."
When the discussion touched on Sen. Chris Dodd's (D-Conn.) latest financial reform bill, one MSNBC anchor jokingly asked, "We're going to have reform, right? And it's all going to be OK? There will not be another meltdown right?
"No, unfortunately," Johnson said. "I wish that were true."
The next crisis will come sooner rather than later, Johnson said, unless the nation's largest banks are broken up and some sort of Glass-Steagall-type approach is taken to separate commercial banks from investment banks.
"The absolutely necessary step is to make the banks smaller, Johnson said. "Too big to fail is exactly the right term, "