No Matter What Your Politics, Sign Bernie Sanders’ Petition on ‘Too Big to Fail’

Our colleagues at self-evident.org have provided a concise definition of ‘Too Big to Fail’: “The term for financial firms whose liabilities are implicitly guaranteed by all of us, free of charge.”

Self-evident blogger Nemo asks all of us — no matter what our political leanings or philosophy — to get on board and sign Bernie Sanders’ petition to end a destructive practice and free our regulatory system and our democracy from capture by these institutions. From Nemo:

“If you are like most people, you are attached to some political ideology, and you think all of the world’s problems are caused by the “other side”. I want to try to convince you that this issue is special. I want to ask you, just this once, to join with people on all sides to declare this situation intolerable. (Scroll to the end to find out what you can do.)

If you are a fiscal conservative, then I say to you: We are bankrupting our nation. By guaranteeing the liabilities of large financial firms, we are effectively allowing them to gamble with taxpayer money. Eventually, their bets will go bad. The result will be crisis after crisis, where the losses from the bad bets are transferred to the public balance sheet, just as they have been for the last two years. This will continue until we destroy the creditworthiness of the U.S. itself.

If you are a social conservative, then I say to you: Oligarchy is not a family value. These banks care only about money, and through their capture of the state, they have the power to extract it from society. They have created, nurtured, and imposed a culture where wealth is the only virtue.

If you are a liberal, then I say to you: Breaking them up is the only answer. No amount of regulation can contain the threat posed by these firms, because their sheer power allows them to control our public institutions. (Where do our Treasury officials come from? Where are they going next?) They will inevitably manage to avoid or simply to repeal any regulation, just as they did for the past several decades. Their political power cuts across party lines; look up the history of the repeal of Glass-Steagall for just one example.

If you are a “moderate”, then I say to you: The status quo is a disaster waiting to happen. You may think that large firms bring some kind of benefit, possibly due to economies of scale. I believe that argument is dubious, but even if it were true, any benefits pale beside trillions of dollars in contingent public liabilities. Moreover, breaking up these firms is not so radical; it is similar to the anti-trust actions our government has been taking for a century now. And the resulting smaller financial sector would be the same as the one that served us well for decades.

If you are a populist, then I do not need to say anything; you are probably already sharpening your pitchfork. Goldman Sachs is going to give its average employee a $750,000 bonus this year. This year! Enough said.

If you a libertarian, then I say to you: These firms are corporations with the power to tax. Taxpayers absorbing losses is the opposite of a free market. The Fed printing trillions of dollars and dumping them in bank vaults is the opposite of limited government.”