Too Big To Fail - Too Big To Exist
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More than a year has gone by since Congress passed the $700 billion bailout of Wall Street. The Federal Reserve has committed trillions of additional dollars in virtually zero-interest loans and other assistance to large financial institutions resulting in the largest taxpayer bailout in the history of the world.
President Bush and Ben Bernanke told us we needed to bail out Wall Street because we could not allow big financial institutions and insurance giants to fail because if they failed it would have led to the collapse of the U.S. and global economies.
Today, most of the huge financial institutions still standing have become even bigger -- so big that the four largest banks in America (JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup) now issue one out of every two mortgages; two out of three credit cards; and hold $4 out of every $10 in bank deposits in the entire country.
If any of these financial institutions were to get into major trouble again, taxpayers would be on the hook for another massive bailout. We cannot let that happen. We need to do exactly what Teddy Roosevelt did back in the trust-busting days and break up these big banks.
That is why I introduced legislation that would give the secretary of the Treasury 90 days to identify every single financial institution and insurance company in this country that is too big to fail and to break up those institutions within one year.
If it’s too big to fail, it’s too big to exist.
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I have heard it argued that having companies "too big to fail" is not a problem, as the other companies not in this category are merely "not too big to fail." Actually, it results in most of the other companies being "too small to survive." The big sucking sound of this decade was the big banks drinking our milkshake.
Many of the arguments about these banks' "successes" are founded in those banks' own public pronouncements. A good accountant and a good attorney can project whatever image you want them to, largely by dividing the organization (on paper) into a bewildering number of supposedly discrete pieces and then hiding the garbage under whatever "shell game" shells seem handy.
We have a short word for the people who fall for this: "fool."
(With due apologies to the Motley folks, who definitely are not.)
We have a word for the politicians and high-ranking civil officers who help them: "criminal."
But in this case, "fool" will do.
These banks set out to corner the financial markets without buying warehouses in which to store pieces of silver. They would do it all on paper. They would do it by consolidating every form of financial activity under one roof and then letting their accountants and lawyers work their magic. Which they did... to enormous paper-roses profits. But the enterprise itself rotted away in a cesspool of impossibility.
"Too big to fail?" Hell, they don't even exist. You can't support the three-legged stool of banking, finance and insurance under one roof at one time. Can't be done.
Chase Manhattan complains that the new credit card laws will cost banks (ie. reduce their profits by) about half a billion next year
and
the three biggest banks to exit the Troubled Asset Relief Program -- will hand out about $30 billion in bonuses this year, according to analysts’ estimates.
They may be too big to fail but they're too corrupt to stand.
Indeed ... too big to fail is too big to exist ... BUT that is NOT enough. The banking activities MUST be separated from the INVESTMENT banking and TRADING activities. And, these latter activities need to be reigned in
Just for example, take one look at today's activity in the S&P index for example ... after already moving higher for six straight days, today the S&P (especially the futures) moved up continuously without any significant volatility whatsoever ... only to fall off a cliff tonight in the aftermarket. The institutions that can manipulate the markets like this should be broken up immediately. They're destroying the small bit of credibility left in the markets.
"If it’s too big to fail, it’s too big to exist."
I couldn't agree more.
Mr. Sanders; the challenge is great. It remains to be seen if the top will gain more control, while main street takes another hit. When are we going to demand change of the Treasury, assuming they don't list all the big gainers of the stimulus?
"If it’s too big to fail, it’s too big to exist."
Most true. Thank you for you service Mr. Sanders. I wish there were more Senators such as yourself.
It feels as though we have Sanders, Feingold, Lee, Frank, and then 531 others who are bought off.
These "too big to fail" Institutions have used their superior marketing resources to convince a majority of Americans that it is unpatriotic ,or un-American itself, to stifle or interfere in our capitalistic sytem . Or even question it. There are too many people that refuse to admit that capitalism and many of those that use the capitalist system are dangerous to this country and it's people when no real boundries or rules are enforced .
Our problem is not government. Our Problem is there are too few boundaries between corperate America and The American Governemnt itself. . There are too many politicians using thier influence and positions as an edge in the capitalist sytem they are playing on the side. Until we seperate the two, nothing will change.
The "teabaggers" are simply fighting the battles of the very corperations that continue to take their money while increasing the cost or denial of the services they provide . These TBTF Institutions have thier strings attached to enough politicians to ruin the reputation and efficiency of the government they influence or make it impossible to pass any meaningful legislation that would hurt the sytem that is providing these "Public Servants" the most enticing financial rewards .
Thank you Senator Sanders.
ditto. Why is that there are so few politicians like Bernie who actually represent the PEOPLE?
Unfortunately, money talks louder!
Go Bernie!!
Bernie Sanders is correct! Bank executives fire employees that don't perform well. So, we should do the same to them - NO MORE BAILOUTS! Bail out the homeless, the unemployed, the sick and broke but, please no more for banks. Thank you, Bernie.
Thank you for this, Senator Sanders, and the support and preference you've always shown for The People instead of a personal re-election fund - on all issues.
I'm for filing Anti-Trust litigation against EVERY 'too big to fail', and have been recommending just such a course of action since the election. Enough suits being commenced would make many companies start thinking divestiture before it also happened to them.
Two other regulatory measures could also greatly help prevent OUR Treasury ever again being tapped due to unscrupulous business models of irrational greed might be:
A Transfer Tax at twice it's highest ever previous level in OUR country, AND regulation limiting the number of Boards of Directors of major corporations upon which one person can legally sit.
Use the per-share Transfer Tax proceeds to repay OUR Treasury 'every dollar' of bailout and TARP monies lost first, then next establish a 'too big' defense shield trust to forever protect OUR Treasury and economy from such criminally over-leveraged greed in the future.
Limiting the number of Boards of Directors one person can participate in would have many benefits. It can prevent multi-sector market manipulations by a just few with less principle, and also spreads a bit of the power base in OUR country to be in more hands rather than less.
Both of these topics could use more discussion by the Legislative Branch without lobbyists in the room.
Thank you, again, sir.
Senator Sanders is right on target. It is unconscionable to continue to promise to prop up the very corporations who have so seriously threatened our way of life. And who now have almost unlimited market power and act in such an arrogant fashion towards everyone else. If we would just apply the anti-trust laws already on the books and then augment it with Senator Sanders bill, we could begin to unwind this nightmare.
"Too big to fail" - the functional definition of economic monopoly; once again, Senator Sanders is on target.
The federal government is a monopoly.
Yes, and it's SUPPOSED to be the ONE AND ONLY organization ABOVE ALL OTHERS that represents and serves THE PEOPLE, as in "WE THE PEOPLE". Would you prefer that we had 2 or more federal governments?
The problem is not that it's singular, but that it has utterly capitulated to corporate interests.
The government is not a corporation. In theory it is the voice of the people. It is of for and by us. If the government fails the people fail. Corporations have managed to infiltrate our government vis a vis lobbying and campaign contributions and now the government is acting more like a corporation than the governing body of the people. Which is what it is supposed to be. Your statements don't make sense. Government is not too big to fail. If our government fails we fail. If we fail our government fails. This is the genius of our constitution and our republic. Don't like it? Move to China.
You do know what government is? don't you?
When you say that the United States is too big to fail/to big to exist, do you expect a peaceful breakup like the Soviet Union's or another war like we had in 1861-65?
As soon as I first heard the words, "Too big to fail", "Too big too exist" were the first words that came to mind that are suitable for sharing here on HuffPo. I am inspired that this rare and enlightening member of the U.S. Senate shared this view. I wish we had 99 more like him and at least 400 in the House and one in the White House.
Thank you, so much, Senator Sanders. I pray that we live to see justice done.
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