The underlying logic of this federal policy is that the biggest banks cannot fail and shut down, even if they make terrible investments or wreak great harm to the economy, because the U.S. economy and millions of ordinary people would become financially destitute. Sanders said this “scheme…is nothing more than a free insurance policy for Wall Street.” Compared to before the crash of 2008, the biggest banks in the country are larger than ever, he said, adding, “if a bank is too big to fail, it is too big to exist.”
2. Break up the biggest banks.
If elected, Sanders said he would direct the Treasury Department to compile a list of the institutions “whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout.” Using the power of executive authority, he would break up these institutions. “Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy as authorized under Section 121 of the Dodd-Frank Act.”
3. Pass a 21st-century Glass-Steagall Act.
This Depression-era law, which was repealed by Congress under President Bill Clinton, prevented commercial banks from investing in risky and arcane financial instruments, such as bundled home loans during the housing market bubble that predated the 2008 financial market collapse.
4. End too-big-to-jail.
Sanders said that the government needs to run Wall Street, not the other way around, which he said is the reality today. He said that “equal justice under the law” means that banking and finance executives whose reckless gambles damaged people’s lives must face real criminal penalties including prison.
5. Criminalize Wall Street’s business model.
One of Sanders’ most incisive comments concerned Wall Street’s ways of doing business, which he said are based on intentionally ripping off average Americans and engaging in all kinds of unethical and illegal behaviors. He said the government must do more to penalize companies that routinely rip off the public and richly reward the executives overseeing that process.
6. Tax the casino culture.
Sanders said one of the keys of reforming Wall Street was ending its culture of financial speculation. He said he would do that by imposing a transaction tax aimed at high-speed, high-volume traders who are not investing “in the job-creating economy.” Those funds would then be used for cutting the cost of higher education.
7. Reform the financial rating agencies.
This is the industry that not only rates people on their personal financial credit but also rates investments—and before the 2008 crash falsely labeled as credible many of the risky investments that failed. These firms are like foxes guarding the hen house, Sanders said, and cannot base their profits on getting paid by the companies whose products they are rating. “We will turn for-profit credit rating agencies into non-profit institutions, independent from Wall Street. No longer will Wall Street be able to pick and choose which credit agency will rate their products.”
8. Cap credit card interest and ATM fees.
Banks and credit card companies must be stopped “from ripping off the American people by charging sky-high interest rates and outrageous fees,” Sanders said. “It is unacceptable that Americans are paying a $4 or $5 fee each time they go to the ATM. It is unacceptable that millions of Americans are paying credit card interest rates of 20 or 30 percent.”
9. Let the USPS offer banking.
The post office’s money order service could be greatly expanded “to give Americans affordable banking options,” Sanders said. “The reality is that, unbelievably, millions of low-income Americans live in communities where there are no normal banking services.”
10. Reform the Federal Reserve.
Sanders said this arcame institution that regulates the flow of the U.S. currency and interest rates charges to banks must be reformed so that its primary purpose is serving the public, not private bankers. “When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system,” he said. “We need the Fed to act with the same boldness to combat unemployment and low wages.”
“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it”. — Congressman Louis T. McFadden in 1932 (Rep. Pa)
1. If the total amount of currency circulating increases faster than the total value of goods and services in the economy, each individual piece will be able to buy a smaller portion of those things than before. This is called inflation.
2. On the other hand, if the money supply remained the same while more goods and services were produced, each dollar’s value would increase, in a process known as deflation.
3. So which is worse? Too much inflation means that the money in your wallet will be worth less tomorrow, making you want to spend it today. While this stimulates business, it also encourages overconsumption or hoarding commodities like food and fuel, raising their prices and leading to consumer shortages as well as more inflation.
4. But deflation makes people want to hold on to their money. The decrease in consumer spending reduces business profits, which leads to more unemployment and a further decrease in spending, causing the economy to keep shrinking.
So most economists believe that while too much of either is dangerous, a small consistent amount of inflation is necessary to encourage economic growth. The Fed uses vast amounts of economic data to get the numbers just right in order to stimulate growth and keep people employed without letting inflation reach disruptive levels.
Harriet Tubman was an amazing woman who championed freedom
for individuals and fought against slavery by an oppressive government.
Compare that to Andrew Jackson, who might be the second finest
example of an out of control executive branch that ignores all of the checks
and balances set up in the Constitution.
This is a quiet win for everyone who believes in freedom for
individuals and the Constitution.
However there’s a much larger issue here.
Most citizens only understand the government’s role in our money as the people who get to change the
faces on our bills and then hit the print button.
When people talk about the system being rigged, they really need to be thinking about the
Federal Reserve. A group of unelected individuals get to play around with important
governmental levers. These levers can siphon and add trillions of dollars into
our economy without an average citizen even noticing.
That’s the real issue.
The government plays tricks on people
who have money without there being any real changes in economic production or value.
And most people only see the symptoms without ever knowing the cause.
There are many ways for individuals to make more money (like mandating
people pay everyone a minimum of $15 an hour…), but issues can also be solved by
allowing the purchasing power of a dollar to increase.
The Federal Reserve should be concentrated on creating a strict
and unchanging rule based monetary policy to: provide market stability, allow
natural growth and corrections tied to real changes in value and production, and to get
unelected bureaucrats out of the business of tampering with money for short
term political gains with damaging long-term results.
So change the face on the piece of paper. That piece of
paper is slowly becoming more and more useless as bureaucrats rob the real
value from it and enrich themselves.