New Sanders bill: If a bank is too big to fail, it's too big to exist

Originally published at: https://boingboing.net/2018/10/05/break-em-up.html

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Ah yes. The age-old “mere $0.7 trillion subsidy” persuasion.

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I am pretty sure there are three zeros missing from that number. 700 million is off by a factor of a thousand (maybe next time use words instead of typing a long string of zeros and hoping you didn’t leave any out).

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If this is the title of the bill, it won’t be even read by a majority of people deciding on it.

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This is an excellent idea with absolutely zero chance of ever making it into law, because the organisations it would affect are wealthy enough to buy whatever votes they need to ensure that it does not.

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If a company is about to fail, and we the American people bail it out with our hard earned money, why don’t we own it? If the money had come from a private source, that private investor would end up with a decent stake in the bailed out business. So why don’t the American people now run these banks?

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At least with the private investor, the power to make decisions remains concentrated. If the public were to own large portions of capital or industry - whether financial or otherwise - they might want to have a say in how it’s run and what’s done with the profits. The historical record indicates that the American centers of power will not allow that to happen without first resorting to force.

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I completely agree with that assessment which is why I think we should make public ownership a condition of bailout. I suspect we’d see a lot fewer bailouts… don’t you?

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Scientific notation ftw!

I think you’d see more Zuccotti Parks. More people chanting “nationalize the banks/automakers” being crushed by police force.

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Business as usual, then.

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A relative of mine is relentlessly critical of Bernie Sanders, seeing his “revolution” as a call to, I don’t even know, throw molotovs through shop windows and tear down systems in a reckless frenzy that they equate to Trump’s extremism. All I ever see is Sanders addressing issues that no other politician ever talks about but that are on the minds of every rational person. The worst criticism I can think of is that the country is already too corrupt and far gone for even the most common-sense, obvious solutions to ever happen, but I’m still glad someone is bringing these issues up.

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I have never, and will never, vote for anyone who supported TARP. That includes among others McCain, Obama, Romney, Trump, and Clinton.

I have never and will never vote for anyone who supported Dodd-Frank, which cemented the position of the TBTF banks in our government.

“Bailout” is a term that should only occur in the context of jumping out of airplanes.

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Of course, just a week ago Cory posted a bit on Modern Monetary Theory, under which the bailout can not be said to have used “taxpayer money”, because the US government does not spend taxpayer money, it (essentially) creates money when it spends it, and destroys it when it collects taxes, and the debt and deficit are anachronisms.

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Mike Collins wrote about this three years ago in Forbes. One of his specific recommendations was break up the “too big to fail banks.” But then, many of us have been saying that since the 90’s, and more since 2008.

Read his article, it’s good. Oh, and the $700 billion is just the face value they sold to the public. The real total commitment of the government is shockingly higher. https://www.forbes.com/sites/mikecollins/2015/07/14/the-big-bank-bailout/#1026a3462d83

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It bothers me that some writers I respect still refer to the bailout of 2008 as “necessary” or “successful” when there is no proof that it was either.

David Malki’s Wondermark rarely goes explicitly topical, but when he does, it’s masterful. This from September 2008:

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Well the government did own a stake in these banks following this bail-out, and likely still owns some. But a great deal was paid back, and at decent profit. However the fact is the government did not leverage its ownership to affect change, and in fact its greatest leverage was before the investment, when influence greater than their ownership share might have been exerted.

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Exactly. I also don’t understand how stadiums built with taxpayer dollars aren’t owned by those taxpayers as well. Tax money should only be allowed to be spent on public works, and if a private entity needs public money it should then become a public entity upon acceptance of that money. Otherwise they can take out a loan like the rest of us schmucks.

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I must admit, as many problems as I have with Bermie*, this is in his wheelhouse. This is much better framed than his last bills.

*all trivial, I admit

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