Central to Bernie Sanders’ dogma is breaking up financial institutions that are “too big to fail”. As president he’ll have the Treasury Department make up a list of Too Big To Fail commercial banks and insurance companies then within one year he promises his 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.
Actually under the Dodd-Frank Act federal regulators are already keeping a list of Systemically Important Financial Institutions. Section 121 does allow the Federal Reserve to break up any large financial institution that is deemed a grave threat to the financial stability of the United States. Doing so requires the backing of the Federal Reserve’s board of governors plus a two-thirds vote by members of the Financial Stability Oversight Council (FSOC). They are not subject to commands from the Executive Branch. The Fed governors are appointed for 14-year terms. Five of the terms won’t expire until the 2020’s. There have been some radical views expressed by the Fed president but it is highly unlikely the current board would take such an extreme step just because there’s a new president in town. (Fed prez: Consider breaking up big banks)
The Daily News interviewed Sanders asking for some details on how he was going to accomplish his major campaign pledge and what the economic consequences would be if he succeeded. His answer was a bit like one from the Magic Eight Ball: hazy, try again later.
Or perhaps Bernie is looking into a crystal ball. When asked about the impact on real people working in the financial sector, Bernie dodged reality in favor of this reply:
What I foresee is a stronger national economy. And, in fact, a stronger economy in New York State, as well. What I foresee is a financial system which actually makes affordable loans to small and medium-size businesses. Does not live as an island onto themselves concerned about their own profits. And, in fact, creating incredibly complicated financial tools, which have led us into the worst economic recession in the modern history of the United States.”
That’s how it is with Socialists, the purity of the future is too beautiful to worry about the nasty things we have to do today.
Socialism is the ideal state, but it can never be achieved while man is so selfish.