Elizabeth Warren Introduces Legislation that Forces Big Banks to Stop Gambling With Our Money

elizabethwarrenDid you know the biggest banks are even larger than they were before the financial collapse in 2008? How about the fact that all it takes is one misstep and the whole “too big to fail” house of cards could come tumbling down and possibly take us back into another recession – or worse?

Bank of America, Citigroup and others have been found to have a substantially lower credit rating if it were not for the government backing and protection they currently enjoy. Basically, their debt would be less likely to be bought if it wasn’t for the likelihood of us as taxpayers being forced to choose between bailing them out once again, or allowing the economy to crash and burn.

We know how it worked out last time. Bank of America repaid our kindness by finding ways to push homeowners into foreclosure and even tried to send an Occupy protester to prison for writing on a public sidewalk with chalk outside their branches in San Diego. Even as they cried for a handout, the banks were busy playing a giant shell game of selling packages of debts and derivatives, even betting against themselves in what could only be described as some sort of bizarre and nightmarish casino – except that it was real. Not only was it shockingly true, they were playing with our money as well. Your checking account, your savings – all of that goes into the giant pile of money they were gleefully playing in like a scene from “Scrooge McDuck.” If they want to play with their money, that’s fine. But it is absolutely beyond the pale to allow them to take risks with the cash we gave them that we cannot afford to lose. If Bank of America wants to make bad investment choices, they can do it with their funds, not ours. The FDIC should not have to protect our savings from the bad decisions of financial CEOs.

The 21st Century Glass-Steagall Act would force banks to choose between being traditional banks or existing as hedge fund and other high risk entities. They can be lenders and safekeepers of our paychecks or they can trade in derivatives and such, but not both. Whether you’re liberal, conservative, independent, libertarian or other – this just makes common sense.

When you have the unusual duo of John McCain and Elizabeth Warren teaming up on a bill, you know this is an undoubtedly bipartisan idea that deserves consideration. Do a little extra research on it yourself and if you think it makes sense, contact your elected officials and urge them to give it their support. The time for big banks to play dangerous back alley dice games with our cash and our economy must come to an end.

Comments

Facebook comments

  • Pepe Pechugas

    Is it just me, or should ANY institution that is “too big to fail” be broken up into smaller pieces? How come no one in congress has thought of this? How come the Obama Administration not do this to AIG when they gave it the check?

  • laeiryn

    Don’t we have Reagan to thank for the revocation of the original Glass-Steagall act?

    • Susan Heart

      We have Reagan to thank for all Reaganomics. I was born during his presidency, so it feels unfair that now that I’m newly an adult finishing my schooling I should have to enter the workforce in this economy.

    • Bill Rubin

      Actually, it was repealed in 1999 under Bill Clinton. Unfortunately, the Democrats need to eat crow on this one, even if it was a GOP controlled Congress.