Who Will Help Bernie Sanders Pass The Too Big To Fail, Too Big To Exist Act?

Who does Wall Street most trust in Congress to take care of their business for them and make sure they get the kind of friendly legislation the banksters claim they need to keep their bottom line robust, their bonuses obscene and the campaign contributions flowing? Well, if you look at the financial sector's political contributions since 1990-- removing the presidential candidates from both parties-- you find the biggest share of the $2,131,628,813 Wall Street forked over to the DC politicians went to Republicans. But note the 3 current Members Wall Street has given the most "love" to:

• Chuck Schumer (D-NY)- $21,052,681
• Mitch McConnell (R-KY)- $11,444,704
• John Boehner (R-OH)- $11,239,584

They must really like Schumer; they gave him nearly as much money as the very bank-friendly Senate Majority Leader and the Speaker of the House combined!

Last cycle employees of the finance sector contributed a grand total of $33,150 to Elizabeth Warren and $4,200 to Bernie Sanders, quite a contrast with the $3,717,082 they gave McConnell or even the $1,689,091 they gave Schumer (who did not have a reelection to worry about). Let's look at two states with hot Senate races next year that include contested primaries pitting progressive present House Members against Establishment shills, Florida and Maryland. In Florida, last cycle Wall Street gave Patrick Murphy (New Dem-$1,127,650), Ron DeSantis (R-$233,890) and Alan Grayson (D-$76,617). In Maryland, Chris Van Hollen (D-$228,600) and Donna Edwards (D-$36,400).

Yesterday Bernie Sanders introduced for the third time a bill, the Too Big To Fail, Too Big to Exist Act, which is "designed to break up financial institutions that are so big, they create the risk of blowing up the American or global economy." Bernie crafted the legislation to:

• require the breakup of JP Morgan Chase, Citigroup, Goldman Sachs, Bank of America, and Morgan Stanley within one year of enactment.

• create a “Too Big to Fail List” of banks and bank holding companies who pose a threat to the financial system. This list will be compiled by a super-committee of bank regulators, or the Financial Stability Oversight Council (FSOC), based on a variety of factors enumerated in the bill.


• direct the Secretary, within a year of enactment, to break up these institutions.


• prohibit any institutions on the “Too Big to Fail List” from accessing Federal Reserve discount facilities and from using insured deposits for speculative activities, derivatives, or hedging.

Predictably enough, the Wall Street Journal headline was Bernie Sanders Steps Up Attack on Wall Street. The companion legislation in the House is being sponsored by Brad Sherman (D-CA) and Alan Grayson (D-FL). Sanders knows this Republican-controlled Congress is not going to pass his bill. He recognizes what a strong test it is, however, for candidates. Bernie: "When Wall Street tells members of the Congress not to do anything that will damage their interests, most members of Congress adhere to that. Can we pass legislation in the United States Congress that Wall Street opposes?" It will be a big test for Hillary Clinton, of course. But it may also wind up being that big line in the sand for many candidates. Yesterday I had a call from Paul Clements talking about how excited he was about Bernie' bill. He's going to run against Fred Upton in MI-06 again next year.

In the Florida Senate race, you have a far right Republican teabagger (DeSantis) plus a Republican-lite Wall Street whore (Murphy) opposing the bill while Alan Grayson is all-in pushing it to his colleagues in the House. If Bernie's ideas are going to ever get a chance to prove themselves, it will be because of men and women like Alan Grayson and Donna Edwards, not Establishment schnooks like Patrick Murphy and Chris Van Hollen. This morning, Grayson told us, "We've done nothing to resolve the problem of banks that are deemed 'too big to fail,' a problem that almost destroyed our economy seven years ago. And to paraphrase Santayana, those who ignore history are deemed to repeat it."

Bernie's statement emphasized the obvious: "No single financial institution should have holdings so extensive that its failure could send the world economy into crisis. If an institution is too big to fail, it is too big to exist."

The biggest banks in the United States are now 80 percent bigger than they were one year before the financial crisis in 2008 when the Federal Reserve provided $16 trillion in near zero-interest loans and Congress approved a $700 billion taxpayer bailout.

“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.”

The 2008 financial crisis had a devastating impact on the U.S. economy. It cost as much as $14 trillion, the Dallas Federal Reserve calculated. The Government Accountability Office pegged the cost at $13 trillion. The Congressional Budget Office estimated that the crisis nearly doubled the national debt and cost more than the Bush tax cuts and the wars in Iraq and Afghanistan combined.

The six largest U.S. financial institutions today have assets of some $10 trillion, an amount equal to almost 60 percent of gross domestic product. They handle more than two-thirds of all credit card purchases, control nearly 50 percent of all bank deposits, and control over 95 percent of the $240 trillion in derivatives held by commercial banks.

...The list would have to include Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo. These eight institutions already have been deemed “systemically important banks” by the Financial Stability Board, the international body which monitors the global financial system. Under the legislation, the U.S. Treasury Department would be required to break up those and any other institutions deemed too big to fail by the treasury secretary. Any entity on the too-big-to-fail list would no longer be eligible for a taxpayer bailout from the Federal Reserve and could not use their customers’ bank deposits to speculate on derivatives or other risky financial activities.

I haven't heard a response from Van Hollen yet, but this is exactly the kind of issue that separates progressives like Donna Edwards from fakers like him-- not to mention strategic thinkers like Grayson from careerist sad sacks like Patrick Murphy. You can contribute to making the Senate a better environment for progressive values and principles here at the Blue America 2016 Senate page.