Plutocracy vs. Democracy: Break Up the Big Banks Amendment Votes Will Expose the Real Divide in America

07/03/2010 05:12 am ET | Updated May 25, 2011

Plutocracy = rule by the wealthy, or power provided by wealth that uses government for its own interests. In a plutocracy, the degree of economic inequality is high while the level of social mobility is low. This can apply to a multitude of government systems, as the key elements of plutocracy transcend and often occur concurrently with the features of those systems. (Wikipedia, modified).

My colleague, James Boyce, and I created to start a dialogue and movement to protect the American people against the collateral damage that occurs when a big bank fails.

Our reasons were quite simple, and did not require a moral or legal judgment about banks' past behavior, nor complicated economic theories to support it. The 'debate', as it were, had been focused on how to resolve a big bank failure so taxpayers were not injured.

It was the wrong answer. More importantly, it was the wrong question.

The question should be how to protect the American people against an economic meltdown against a bank failure, and only secondarily to protect our tax dollars. No regulatory scheme can guarantee against human failure, and a failed big bank that tanks the economy is simply unacceptable.

There is no economic, social or political reason for banks whose failure would cause a general economic meltdown to be allowed to exist. None. Zero. Whatever the so-called benefits, we know from recent experience that it is too risky. This is not theory or projection. It just happened. You and I have no say in what risks they take, and have never agreed to be put at risk ourselves for their mistakes, or their malfeasance, it really does not matter which it is.

The Brown-Kaufman amendment to limit banks to total assets of $100 billion and the Cantwell-McCain amendment to restore the 1930s Glass-Steagall restrictions on banking will be the true litmus tests of which side a member of Congress and which side a political party is on: the American people vs. the power elite.

Indeed, the enormous political power, displayed this year by the big banks' effective resistance to reform despite having caused immense pain and suffering to the American people, is also inconsistent with democracy.

It does not matter whether a member of Congress or Senator is Republican or Democrat, Conservative or Liberal, Libertarian or Progressive, Pro-Choice or Anti-Choice, pro-environment or pro-polluter, urban or rural or suburban. If you are against breaking up the big banks, you are against democracy, and favor plutocracy.

Rarely has an issue been so clear that there are no excuses or explanations that are even colorably credible for votes against these amendments.

It is that simple. When considering a candidate to support in the 2010 elections, watch their votes on this issue.

It is the true divide in American politics. Perhaps it will trigger a long overdue re-alignment.