Robert Reich: Congress Must Break Up the Banks

[marmar]

via AlterNet:



Robert Reich's Blog / By Robert Reich

Robert Reich: Congress Must Break Up the Banks
If the big banks stay big, their political lpower will stay big. That power will put taxpayers on the hook for the next banking mess.

April 7, 2010 |


A fight is brewing in Washington – or, at the least, it ought to be brewing – over whether to put limits on the size of financial entities in order that none becomes “too big to fail” in a future financial crisis.

Some background: The big banks that got federal bailouts, as well as their supporters in the Administration and on the Hill, repeatedly say much of the cost of the giant taxpayer-funded bailout has already been repaid to the federal government by the banks that were bailed out. Hence, the actual cost of the bailout, they argue, is a small fraction of the $700 billion Congress appropriated.

True, but the apologists for the bailout leave out one gargantuan cost — the damage to the economy, which we’re still living with (witness the latest unemployment figures). Leave it to the Brits to calculate this. Andrew Haldane, Bank of England’s Financial Stability Director, figures the financial crisis brought on by irresponsible bankers and regulators has cost the world economy about $4 trillion so far.

So while the bailout itself is gradually being repaid (don’t hold your breath until AIG and GM repay, by the way), the cost of the failures that made the bailout necessary totals vast multiples of that. ............(more)

The complete piece is at: http://www.alternet.org/economy/146332/robert_reich%3A_congress_must_break_up_the_banks

[xchrom]

1. They need to be investigated and broken up.

Going back any number of years -- it's a sure bet
told find fraud, illegal risk taking, gouging,
and on and on.