“The Sentiment Is Swinging”: Unanimous Senate Vote Bolsters Movement To Break Up Big Banks
It’s nearly impossible to get 99 U.S. senators to agree on anything.
But this past weekend, 99 senators agreed to send a non-binding message that the $83 billion subsidy “too big to fail” banks get from the government needs to end. The measure was co-sponsored by senators Sherrod Brown (D-OH) and David Vitter (R-LA).
The implicit subsidy first came to light in February when a Bloomberg News report found that “recurrent bailouts of the largest financial institutions have given [big banks] a unique advantage: They get a break on their borrowing costs, because creditors expect taxpayers to support them whenever they get into trouble.”
Shortly thereafter, Attorney General Eric Holder made the shocking admission that the Justice Department exercises restraint in prosecuting big banks for fear of shocking the global financial system.
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,” Holder said, during testimony to the Senate Banking Committee.
Now all of the Senate’s Republicans have joined with senators Brown and Elizabeth Warren (D-MA) — who have long warned of the big banks’ continued ability to wreck havoc on the economy — to call for an end to the implicit subsidy.
“I’m glad that Republicans and Democrats can agree: ‘Too big to fail’ needs to end, and these big-bank subsidies make no sense,” Senator Warren said.
Bank lobbyists have denied that the subsidy exists. But as a Bloomberg editorial notes, they’ve rejected any steps that would prevent the government from having to serve as their backstop in case of a crisis.
“If big banks don’t get a subsidy on their debt, it’s hard to understand why they’re so adamantly opposed to measures, such as increased capital requirements, that would put a limit on their borrowing,” the editors noted. “Large banks commonly borrow $25 or more for each $1 in equity — or capital — they get from their shareholders, compared with less than 50 cents per $1 of equity for the average U.S. corporation.”
Financial reform following the financial crisis was weakened by bank lobbying. As Senator Dick Durbin (D-IL) noted at the time, the “banks own the place.” And by “the place,” he meant Congress.
This vote shows the sentiment is swinging against the banks. Whether senators are willing to vote against them when actual legislation is on the line still remains to be seen.
By: Jason Sattler, The National Memo, March 25, 2013
“NRA”: The National Regulation-Resisters Association
Sometimes common sense isn’t a common trait.
Wayne LaPierre, the National Rifle Association’s executive vice president, is a shining example of this. He continues to voice resistance to even the most basic kinds of changes in existing gun policy, changes that almost all Americans support, changes that would have little impact on the rights and ability of sane, law-abiding citizens to purchase legal weapons.
First, some background.
The White House released its plan to reduce gun violence two weeks ago, a month after the horrific school shooting in Newtown, Conn.
The plan covered closing loopholes in the background check system, banning assault weapons and high-capacity magazines, as well as improving school safety and mental health services.
Public opinion polls suggested that people generally supported the president’s plan.
A Gallup poll conducted the day after the president presented his plan found that 53 percent of Americans would want their representatives in Congress to vote for it.
An ABC/Washington Post poll last week found that 53 percent of Americans favored it.
And a Pew Research Center poll last week found that a majority of Americans thought the plan was about right or didn’t go far enough. Only 31 percent thought that it went too far.
In fact, one of the greatest points of agreement among Americans is the need for universal background checks, as the president proposed.
A Gallup poll released last week found that 91 percent of Americans would vote to “require criminal background checks for all gun sales” if they could.
From a public relations perspective, trying to find some common ground on this issue with the public would seem a no-brainer. Not so for the No Brain-ers.
On Wednesday, at a Senate Judiciary Committee hearing on gun violence, LaPierre, as is his wont, gave a rambling, twisted argument against, that’s right, universal background checks.
LaPierre said during the hearings:
“My problem with background checks is you are never going to get criminals to go through universal background checks. All the law-abiding people, you’ll create an enormous federal bureaucracy, unfunded, hitting all the little people in the country, will have to go through it, pay the fees, pay the taxes.”
He continued:
“We don’t even prosecute anybody right now that goes through the system we have. So, we’re going to make all those law-abiding people go through the system and then we aren’t going to prosecute any of the bad guys if they do catch one. ”
So LaPierre’s argument, if I can follow this spiral of spuriousness, is that if we don’t prosecute “bad guys,” then there is no use in checking buyers in the first place so that “bad guys” could be identified and prevented from making the purchases. As best I can tell that seems to be it, and if that is it then I say: you can’t be serious.
Senator Dick Durbin, a Democrat from Illinois, shot back:
“Mr. LaPierre, that’s the point. The criminals won’t go to purchase the guns because there’ll be a background check. We’ll stop them from original purchase. You missed that point completely. It’s basic.”
The room erupted in applause.
Universal background checks would seem a basic and exceedingly reasonable proposal. I would add that there should also be universal prosecutions for being intentionally misleading during those checks. But LaPierre is a different kind of person. His interests are not the same as most Americans’. His organization and the majority of so-called “pro gun rights” groups are in the business of unfettered gun proliferation as a means of increasing gun industry profit.
This is about money, pure and simple.
Wednesday morning, before LaPierre’s testimony, the Republican Joe Scarborough of MSNBC said on his show:
“You know what the greatest danger to that Second Amendment right and that guarantee is right now? Extremism from the survivalist wing of the N.R.A. that impacts Republicans’ policies nationwide and moves the Republican Party so far away from mainstream America that they lose the House, they lose the Senate again in ’14, and they lose the presidency again. And the next president will be Democratic.”
I would have to agree with that.
LaPierre is fanning paranoia because it helps grow the N.R.A.’s membership rolls and helps the N.R.A.’s friends and benefactors in the gun industry. And the N.R.A. uses its war chest to scare cowering politicians into taking unreasonable positions.
But extreme resistance to change is no longer acceptable with most of the public. People want action. They’re demanding it. Extreme resistance in this climate could prove more politically poisonous, particularly to some Republicans, than upsetting the N.R.A.
At this moment you have an outraged public against the gun profiteers and the gutless politicians. I believe in the end the people will win.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, January 30, 2013
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