We’ve watched in disbelief as our federal government officials ignore industries which are in desperate need of serious fixes. Healthcare and food are high on the list. Muncie Voice has spent plenty of time focusing on the rapidly increasing costs of our healthcare system, and the unsustainability of our food system. Our food system is contributing to our deteriorating health, and thus the circle of rising healthcare costs. However, no industry has been more scrutinized than our financial industry.
During 2008-9, the Banksters from Wall Street received over $16 trillion from the federal reserve and $700 billion from Congress. Meanwhile, they continue making risky investments in derivative products. There are some estimates that off-balance sheet derivatives have an estimated value of a Quadzillion dollars.
Who can possibly be comfortable with 2-3 banks compiling investments which most U.S. citizens cannot even fathom?
In addition, the “too-big to jail” banks are also lending monies to terrorists, known drug cartels, and fixing LIBOR rates on customer transactions. If you’d like to see some shocking news reports, do a simple Google search on “bank fraud”. The amount of bank fraud cases are on the rise and many banks are being warned by regulators to stop credit card fraud.
Speaking of bank regulators, they have shown complete ineptness to do anything with the banks who break the laws. It wouldn’t be too harsh to say that our Justice Department has been an embarrassment during the past several years when the banks have made one headline after another for criminal activity.
Senator Elizabeth Warren (D) is wanting to hold our regulating agencies accountable. Her well known video of lamenting several regulators was all over social media in past weeks. Even though these were senior regulators, they didn’t seem to have any answers for Senator Warren. They were literally shrugging their shoulders when questioned about illegal activity within several banks and why they couldn’t prosecute senior executives and close down some of the more negligent banks. As Warren asks, “What line does a bank have to cross before we close them down?”
While the banks are private and publicly traded, they are still within a financial system that serves U.S. citizens. We should all be uncomfortable knowing the banks have become so large that they are above accountability to our regulators and most of all, our elected officials.
What can be done?
Luckily for us, we have progressive thinkers in both the Senate and Congress. We’d like to introduce you to Senator Bernie Sanders (I) from Vermont and Congressman Brad Sherman (D) from California.
Their solution is to break up the banks. According to Sen. Sanders, ““We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail,” Sanders said. “That is unacceptable and that has got to change because America is based on a system of law and justice.”
“Never again should a financial institution be able to demand a federal bailout,” Sherman said. “They claim; ‘if we go down, the economy is going down with us,’ but by breaking up these institutions long before they face a crisis, we ensure a healthy financial system where medium sized institutions can compete in the free market.”
Their goal is to identify those banks whose default would cause significant damage to the U.S. and global economy.
As Sanders states, “In my view, no single financial institution should have holdings so extensive that its failure could send the world economy into crisis. At the very least, no institution, no CEO in America should be above the law. If an institution is too big to fail, it is too big to exist.”
We couldn’t agree more – we should all support Sen. Sanders, Warren, and Rep. Sherman as they take the lead in correcting a financial system that as clearly outgrown its usefulness to America and beyond.
To read the bill, please visit http://www.sanders.senate.gov/imo/media/doc/GRA13102.pdf.