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Yo_Mama_Been_Loggin

(107,063 posts)
Tue May 24, 2016, 02:13 PM May 2016

Sanders bank plans too vague to succeed

On Wednesday, Bernie Sanders had lunch at the Chieftain, a cozy pub near the San Francisco Chronicle. In days gone by, it served as a lunch spot for parched journalists. Earlier, Sanders had addressed a rally in San Jose; he had another scheduled in Vallejo, California, that night. When he exited the Chieftain by a back door onto Howard Street, passers-by shouted out his name.

-snip-

At the Chronicle editorial board this month, Sanders was personable, but he was disappointing on substance. And it had happened before.

On April 1, Sanders met with the New York Daily News editorial board. He stumbled over questions about how he would break up the big banks. “How you go about doing it is having legislation passed or giving the authority to the secretary of treasury to determine, under Dodd-Frank, that these banks are a danger to the economy over the problem of too-big-to-fail,” he answered. Probed further, Sanders said he didn’t know whether the Federal Reserve has the authority to break up the banks, but he thought the administration “can have” that power. In other words, he had given little thought to the mechanics and had no plan to execute his big dream. He failed to demonstrate even the slightest understanding as to which agencies have the authority to do what he wants done or how a bank breakup might affect the economy of (say, just for the sake of argument) New York.

The Washington Post’s Chris Cillizza described the meeting as “pretty close to a disaster,” with “the Daily News pressing Sanders for specifics and asking him to evaluate the consequences of his proposals, and Sanders, largely, dodging as he sought to scramble back to his talking points.”

By the time Sanders made it to San Francisco, he was on notice that editorial boards expect more thoughtful answers. He had more than a month to bone up on his signature issue. But when the Chronicle’s business editor, Owen Thomas, asked Sanders whether he would break up Wells Fargo, Sanders said he could not answer definitively. He moved to his talking points — “three out of four of the largest banks today are bigger than they were when we bailed them out because they were too big to fail” — railing against the revolving door. He asserted that Section 121 of Dodd-Frank gives the treasury secretary the power to “determine which banks, if they failed, could cause systemic damage to our economy” and that he “would break them up.” But according to Fortune magazine, that provision gives that authority to a large board on which the treasury secretary sits.

Maybe it’s just me, but shouldn’t a man who has been railing against the big banks from sea to shining sea know which banks are so big that he would have to sic the government on them to pare them down to size? Sanders boasted that he would not name a treasury secretary who has worked at Goldman Sachs. The question is: Would he appoint someone who understands how Goldman Sachs works?

http://www.heraldnet.com/article/20160524/OPINION04/160529627

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jmowreader

(50,447 posts)
10. His opponent's position is that we need the big banks, strange as it may seem
Tue May 24, 2016, 06:23 PM
May 2016

In 4Q2015, General Motors had net income of $6.266 billion. ONLY a big bank can deal with that much money.

Breaking up the big banks will NOT solve the problem of bank failures killing the economy - the 1,043 S&Ls that failed in the 1980s were not "big banks" but their collapse did a Number Six on the economy. Regulating the banks, so they don't do stupid shit like invest in junk bonds and junkier derivatives, is what you want to do.

calguy

(5,222 posts)
5. ALL of Sanders' plans were too vague
Tue May 24, 2016, 02:51 PM
May 2016

that is why he didn't succeed.
They all sound great in a stump speech, but when you look at the details...
there just aren't any to be found beyond "tax Wall Street and the billionaires"

stopbush

(24,375 posts)
6. Sanders doesn't even understand the basic issue.
Tue May 24, 2016, 02:54 PM
May 2016

If a bank is solvent, what does it matter if its assets are $1-billion or $20-billion? The problem is with INSOLVENT banks, banks who speculate in risky investments, who bundle those risky investments with other investments and who deceive investors into believing they are investing in something solid.

That is why the banks failed. The reason they were "too big to fail" was because they engaged in risky investments that went bad, so the government stepped in to LOAN them $ so their investors wouldn't pay the price of administrative malfeasance. It had NOTHING to do with solvent backs having too many assets. Assets aren't debt.

Apparently, Sanders believes that being solvent and having billions in assets is either inherently evil or it makes you inherently evil. Apparently, he believes that financial institutions having huge assets means that they can control politicians by using those assets to bribe politicians. Yet Dodd/Frank and the actions of the Obama administration prove that's not true.

He just likes to hear himself talk.

TwilightZone

(25,342 posts)
7. "We'll figure it out later" isn't a terribly convincing argument, as they noted.
Tue May 24, 2016, 03:00 PM
May 2016

Particularly when breaking up the banks was a centerpiece of his campaign from the start.

I find it kind of remarkable that he wouldn't be ready for that question from day one.

SharonClark

(10,005 posts)
8. Repeating talking points may rev up crowd but it's not a plan
Tue May 24, 2016, 03:03 PM
May 2016

Sanders fans don't get that or don't care that he's all talk and no action.

fleabiscuit

(4,542 posts)
9. Reminds me of the grumpy old man yelling at the kids on the street to get off his property.
Tue May 24, 2016, 04:15 PM
May 2016

He needs to know how to answer these regarding breaking up big banks, they have not been secret:

————
Four questions to ask before breaking up the banks

Question One: Can I Keep My Bank?

Question Two: How Does a Global Business Like 3M Bank?

Question Three: What Does This Mean for U.S. Capital Markets and Debt Issuers such as Minnesota?

Question Four: Are We Sure Dodd-Frank Isn’t solving the problem?

http://www.brookings.edu/blogs/up-front/posts/2016/04/04-four-questions-to-ask-before-breaking-up-banks-klein

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