More than three years ago, Congress rewarded Wall Street with the biggest taxpayer bailout in the history of the world. Simultaneously but unknown to the American people at the time, the Federal Reserve provided an even larger bailout. The details of what the Fed did were kept secret until a provision in the Dodd-Frank Act that I sponsored required the Government Accountability Office to audit the Fed’s lending programs during the financial crisis.
As a result of this audit, the American people have learned that the Federal Reserve provided more than $16 trillion in low-interest loans to every major financial institution in this country, huge foreign banks, multi-national corporations, and some of the wealthiest people in the world.
In other words, when Wall Street was on the verge of collapse, the federal government acted boldly, aggressively, and with a fierce sense of urgency to save our financial system from collapse with no strings attached.
The huge backdoor bailout is a slap in the face to American taxpayers, especially since the big Wall Street banks are bigger than ever and because they are taking more risks than ever, presumably emboldened by the fact that they are “too big to fail,” and that the federal government will come bail them out yet again. Here’s what Bernie Sanders proposes to clean up this despicable situation:
1) Break up the big banks.
2) Cap credit card interest rates (“Today, more than a quarter of all credit card holders in this country are paying interest rates above 20 percent and as high as 59 percent.”)
3) Force the Federal Reserve to make low interest loans directly to small businesses.
4) Put an end to speculation that jacks up the price of petroleum products.
5) Demand that Wall Street invest in real businesses instead of “gambling on derivatives.”
6) “Establish a Wall Street speculation fee on credit default swaps, derivatives, stock options and futures. Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street.” Sanders points out that there was such a fee (.2% tax on all sales and transfers of stock) from 1914 – 1966.
Sanders points out that getting these measures passed will be enormously difficult, given that these Wall Street banks spent $5 billion on lobbying over the past decade. Which leads to another enormous need: to get money out of politics.