Hillary, Bernie, and the Banks
Giant Wall Street banks continue to threaten the wellbeing of millions of Americans, but what to do?
Bernie Sanders says break them up and resurrect the Glass-Steagall Act that once separated investment from commercial banking.
Hillary Clinton says charge them a bit more and oversee them more carefully.
Most Republicans say don’t worry.
Clearly, there’s reason to worry. Back in 2000, before they almost ruined the economy and had to be bailed out, the five biggest banks on Wall Street held 25 percent of the nation’s banking assets. Now they hold more than 45 percent.
Their huge size fuels further growth because they’ll be bailed out if they get into trouble again.
This hidden federal guarantee against failure is estimated be worth over $80 billion a year to the big banks. In effect, it’s a subsidy from the rest of us to the bankers.
And they’ll almost certainly get into trouble again if nothing dramatic is done to stop them. Consider their behavior since they were bailed out.
In 2012 JPMorgan Chase, the largest bank on Street, lost $6.2 billion betting on credit default swaps tied to corporate debt – and then publicly lied about the losses. It later came out that the bank paid illegal bribes to get the business in the first place.
Last May the Justice Department announced a settlement of the biggest criminal price-fixing conspiracy in modern history, in which the biggest banks manipulated the $5.3 trillion-a-day currency market in a “brazen display of collusion,” according toAttorney General Loretta Lynch.
Wall Street is on the road to another crisis.
This would take a huge toll. Although the banks have repaid the billions we lent them in 2008, many Americans are still living with the collateral damage from what occurred – lost jobs, savings, and homes.
But rather than prevent this by breaking up the big banks and resurrecting Glass-Steagall, Hillary Clinton is taking a more cautious approach.
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