Senator Bernie Sanders (I-VT) introduced new legislation on Friday that should, he claims, solve the phenomenon of massive and failing financial institutions holding the nation’s economy captive.
It’s all of two pages long.
The Vermont Democrat-Socialist unveiled the “Too Big to Fail, Too Big to Exist Act” — which he billed as a succinct remedy for tackling financial risk and avoiding a repeat of the taxpayer-funded bailouts that occurred just one year ago.
The act is straightforward. It would require that 90 days after its passage, Treasury Secretary Tim Geithner “submit to Congress a list of all commercial banks, investment banks, hedge funds and insurance companies that the Secretary believes are too big to fail.”
Subsequently, one year after the law is enacted, the Treasury Secretary would be required to “break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.”
The rest of the details — like, say, how to do that, how the broken-up entities would be structured, and what authorities would be granted for preempting institutions from becoming too big to fail in the first place — would be filled in during the legislative process, Sanders’s office said. The goal is simply to immediately preempt a duplication of last year’s economic meltdown.
“Here is an example of amazing irony,” the senator said in a video shot by Brave New Films accompanying the legislation’s release. “Three out of the four largest financial institutions in the country who led us to this financial disaster are now bigger then they were before the collapse. So we have got to break these guys up so we don’t see a recurrence of what we saw a year ago.”
The brevity of the Sanders bill is, in some ways, its selling point. The Senator notes in the video that, “unlike the health care bill, which is 1,990 pages, this is all of two pages.” An easier contrast, however, is between the senator’s efforts to tackle Too Big To Fail and those being pursued by others in Congress and the White House.
Last week, Geithner, in cahoots with House Financial Services Committee Chair Barney Frank, released a proposal to not only structure a new system for bailing out failing institutions but also for improved regulations over those institutions. Clocking in at 253 pages, the plan would empower regulators to essentially shut down banks or firms that threatened the stability of the economy. Should a bailout be necessary, other financial firms and not the taxpayers would have to front the bill.