Either we break up the big banks or the big banks break us
Attorney General Eric Holder made actual some news this week amid the GOP’s scandal frenzy: he told the House Judiciary committee that big banks are not too big too jail. He was willing to criminally prosecute the nation’s largest banks, though he hasn’t done so since the financial crisis.
“Let me be very, very, very clear… banks are not too big to jail,” Holder added.
This is a small relief because the fact remains that the big banks are bigger than ever, much bigger than they were when they were able to prevent the decent reforms that followed the financial crisis to take the the crucial step of breaking up the big banks.
Since the 1930s, Glass-Steagall prevented another depression by separating investment and commercial banks by law. In 1999, conservatives passed and Bill Clinton signed a repeal of this crucial New Deal reform. You know what happened less than a decade later.
Not restoring Glass-Steagall after the financial crisis is like sending the Space Shuttle up with the same flawed O-rings the Challenger had.
Despite the fact that a bipartisan bill from Sherrod Brown and David Vitter would force the banks to maintain much more reasonable level of capital has been introduced, this issue is far off the radar of most politicians except Brown, Vitter and Elizabeth Warren. And it will be until another bank bailout becomes inevitable and then it will be too late.
This is an issue the middle class has to become obsessed with and not just because the big banks are getting an $83 billion implied taxpayer subsidy — and not because another crisis will lead to trillions more in debt that the right will use to justify gutting our social safety net. The fact that we cannot fix this glaring injustice, this obvious flaw in our economy, is the worst symptom of a sick political system.
We will win this fight. The question is will we win it before or after we have to bail out the big banks again.
I hope you’ll share this video above and remind people what a real scandal looks like.
[Photo by David_Shankbone via Flickr]