Dennis Johnson - What We Do Now: Standing Up For Your Values in Trumps America

Bernie Sanders

Bernie Sanders is the junior U.S. senator from Vermont.

The time is long overdue for real financial reform in this country. It will not be easy given the enormous power of Wall Street and its political supporters, but it is absolutely necessary if we are to have the kind of strong and stable economy that we need to rebuild the shrinking middle class.

The heads, bankers win/tails, everyone else loses system must come to an end. We need to create a financial system that works for ordinary Americans, not just those on top. Here are just some of the steps forward that will help us achieve that goal.

To create an economy that works for all Americans and not just a handful of billionaires, we have got to address the ever-increasing size of the mega-banks. And we must end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street: the policy of too big to fail.

We need a banking system that is part of a productive economymaking loans at affordable rates to small- and medium-size businesses so that we create a growing economy with decent-paying jobs. We need a banking system that encourages homeownership by offering affordable mortgage products that are designed to work for both the lender and the borrower. We need a banking system that is transparent and accountable, and that adheres to the highest ethical standards as well as to the spirit and the letter of the law.

This is not the banking system we have today. Wall Street cannot continue to be an island unto itself, gambling trillions of other peoples dollars on risky derivatives, acting illegally, and making huge profits, all the while assured that if its schemes fail, the taxpayers will be there to bail them out.

Of course, that is precisely what happened in 2008, when taxpayers bailed out Wall Street. Financial institutions received a $700 billion gift from Congress. And, thanks to an amendment I offered in 2010, we were able to learn that the Federal Reserve provided $16 trillion in secret loans to some of the largest financial institutions and corporations in the United States and throughout the world. We were told that these unprecedented actions were necessary because the financial institutions involved were simply too big to fail. In other words, they were so large and intertwined with all aspects of the economy that if they collapsed, the U.S. economy and maybe the entire global economy would go down with them.

One might have thought, as part of the bailout, these huge banks would have been reduced in size to make certain that we never experience a recurrence of what happened in 2008. Well, thats not exactly what happened. In fact, the very opposite occurred. Today, three out of the four largest financial institutionsJPMorgan Chase, Bank of America, and Wells Fargoare about 80 percent bigger than they were before we bailed them out.