Home Budget, Economy BREAKING: Senate Votes with Wall Street and Against Breaking Up Too-Big-to-Fail Banks

BREAKING: Senate Votes with Wall Street and Against Breaking Up Too-Big-to-Fail Banks

186
1
SHARE

Well, it seems the Senate CAN get something done if it wants to.  And it can garner 61 votes for or against something, if it wants to, particularly when it’s to rally on behalf of Wall Street. That’s right. The gutless Senate refused Thursday night to force too-big-to-fail banks to be broken up. According to Huffington Post,  


The amendment, sponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.), would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system.

Under Brown-Kaufman, no bank could hold more than 10 percent of the total amount of insured deposits, and a limit would have been placed on liabilities of a single bank to two percent of GDP.

The vote was 61 against 33 for.  And, by the way, Virginia, Mark Warner and Chris Dodd spoke against the amendment. They had dubious company. According to Huffington Post, Judd Gregg said this:


“Basically, what it says is if you’re successful…you’re going to break them up? I mean, where does this stop? Do we take McDonald’s on?”

 

Yeh, I can’t believe the “high” (snark) level of Judd’s thinking either.  This is one of the so-called deficit commission members? Does he really think McDonald’s is equatable to our financial system? Although a company as large as McDonald’s could have implications for the economy, it alone does not have the potential to bring down the country’s, and possibly the world’s economy all at once.

Without the ability to force too-big-to-fail banks to divest themselves, thus reducing their relentless push toward excessively leveraged buyouts and monopolistic practices, there is little hope that the banking system can be secure. Of course, there is much more to do to shore up our banking sector than the focus of this one amendment, including the re-installing of Glass- Steagall. But this amendment was an important one.  It’s pitiful that when it comes to our economy our Senate can come together for destructive purpose, to defeat reform, but not to build it.  

  • Elaine in Roanoke

    I’m researching the situation in Canada after reading that Canadian banks are as large – in relation to their national economy – if not larger than American banks. Yet, Canada dodged the derivative/greed/hubris-driven bank panic we had.

    Their regulatory system obviously differs substantially from ours, yet size isn’t the basic component of it.

    (I knew that we were in for something awful when Glass-Steagall was eliminated during the Clinton-Rubin years and while the Republican controlled Congress. The idea that amoral guys driven only by the sort of returns they could earn for themselves and their customers would keep “firewalls” between regular banking and investment activities is absurd on its face.)

    Another thing we had better be looking at for regulation is the operation of private equity groups that buy companies with borrowed money, load it up with debt, then go bankrupt and sell off its parts for a pittance of what they are worth, shedding jobs in the process. The private equity guys walk away with millions in “management fees.”

    Someone should ask Mitt Romney how he and his Bain & Co. have played that sleazy game for hundreds of millions in personal profit. If an individual shouldn’t take on a mortgage he can’t afford, then these sleaze capitalists shouldn’t game the system with debt in order to milk companies of assets and then walk away.