Remember seven years ago when the big banks were begging us for a bailout which President Bush eventually signed off on, to the tune of $700 billion? Senator Bernie Sanders remembers, and after six big banks just admitted to manipulating lending and foreign exchange rates, he wants the largest of the financial institutions to be broken up.
Despite the inevitable opposition in Congress to do anything about fraudulent activity in the financial sector, allowing the big banks to rip off consumers and only pay a fine when they get caught is a practice that has to be stopped.
In a press release yesterday, Senator Bernie Sanders called for the largest banks to be split up in light of the recent news:
“Today, the six largest financial institutions have nearly $10 trillion in assets, equal to nearly 60 percent of our gross domestic product. They control more than two-thirds of the credit card market and one-third of the mortgages. These huge institutions are not only involved in fraudulent activities, they have grown even larger and more powerful since the Wall Street crash of 2008. They are not only an ongoing threat to taxpayers, but a burden on our entire economy.
“In my view, the only effective way of dealing with theses enormous financial institutions is to break them up. Today’s news is just another example of why these too big to fail banks are too big to exist.” (Source)
Imagine if a working class person like you or I had done something remotely like what these banks have been doing? Remember the movie “Office Space” where Peter Gibbons and his friends find a way to round off fractions of pennies from the company’s financial transactions, only to end up with $350,000 almost immediately? That was a fictional story, but just think of the kind of jail time they would have faced had it been real, and the building hadn’t burned down just in time to save them?
Six banks, $5.8 billion in fines. That’s a lot of money to you or me, but that’s pocket change to these banks who see these fines as part of the price of doing business. To make up for these small losses, they’ll just pass on the price to customers and not a single executive or trader will see the inside of a jail cell. Even on that rare occasion when someone from the financial sector does end up in prison for fraud, they end up with a short sentence in a minimum security prison. Bernie Madoff will spend the rest of his life in prison, but that’s probably only because he scammed a bunch of rich people and celebrities, and even then, his bookkeeper got zero jail time despite having been in charge of his records for decades.
In the meantime, we’re spending enormous sums of money to incarcerate petty criminals and non-violent drug offenders, even though the cost of diversionary programs are much cheaper. We’re also allowing law enforcement agencies to seize the assets of private citizens through civil forfeiture, solely on the suspicion that a crime may have been committed. If we can’t break up the largest banks like Bernie Sanders is calling for, and corporations are people too, can we at least seize their assets as if they’re an individual who’s only suspected of a crime? That would be a good place to start.
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