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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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Key Problem: Too Big to Fail
* The crisis showed that large financial institutions worldwide were "too big to fail." (TBTF)
* If we let large financial firms fail suddenly, global panic ensues.
* Reform efforts must focus on getting this intolerable situation under control.
A complete copy of his power point at: http://www.capitalismgonewild.com/2009/11/james-b.html
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.
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.
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.
I couldn't agree more.
"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.
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 .
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.
The problem is not that it's singular, but that it has utterly capitulated to corporate interests.