With his chronically gravelly voice and relentlessly liberal agenda, Sherrod Brown seems to have stepped out of \u201cLes Miserables,\u201d hoarse from singing revolutionary anthems at the barricades. Today, Ohio\u2019s senior senator has a project worthy of Victor Hugo \u2014 and of conservatives\u2019 support. He wants to break up the biggest banks.<\/span>
<\/span> He would advocate this even if he thought such banks would never have a crisis sufficient to threaten the financial system. He believes they are unhealthy for the financial system even when they are healthy. This is because there is a silent subsidy \u2014 an unfair competitive advantage relative to community banks \u2014 inherent in being deemed by the government, implicitly but clearly, too big to fail.<\/span>
<\/span> The Senate has unanimously passed a bill offered by Brown and Sen. David Vitter, a Louisiana Republican, directing the Government Accountability Office to study whether banks with more than $500\u2009billion in assets acquire an \u201ceconomic benefit\u201d because of their dangerous scale. Is their debt priced favorably because, being TBTF, they are considered especially creditworthy? Brown believes the 20 largest banks pay less when borrowing \u2014 50 to 80 basis points less \u2014 than community banks must pay.<\/span>
<\/span> In a sense, TBTF began under Ronald Reagan with the 1984 rescue of Continental Illinois, then the seventh-largest bank. In 2011, the four biggest U.S. banks (JPMorgan Chase, Bank of America, Citigroup and Wells Fargo) had 40 percent of all federally insured deposits. Today, the 5,500 community banks have 12 percent of the banking industry\u2019s assets. The 12 banks with $250\u2009billion to $2.3\u2009trillion in assets total 69\u2009percent. The 20 largest banks\u2019 assets total 84.5\u2009percent of the nation\u2019s gross domestic product.<\/span>
<\/span> \u2026\u2026\u2026<\/span>
<\/span> By breaking up the biggest banks, conservatives will not be putting asunder what the free market has joined together. Government nurtured these behemoths by weaving an improvident safety net and by practicing crony capitalism. Dismantling them would be a blow against government that has become too big not to fail. Aux barricades!<\/i><\/span><\/p><\/blockquote>\n(Emphasis original<\/i>)<\/p>\n
This is not<\/b> what I expect from Will, and there is a part of me that is wondering whether this is more of a political tactic than a recognition of reality.<\/p>\n
If the Republicans want an effective line of attack, they could do a lot worse than saying that Obama is determined to protect and defend the too big to fail banks.<\/p>\n
It is something that would undermine any populist cred that Obama might seek to achieve, and as a bonus, it’s true. <\/p>\n
So, either Will is late to this game, or he’s the the first volley in a Republican attack.<\/p>\n
If I were a betting man, I’d call it even money.<\/p>\n","protected":false},"excerpt":{"rendered":"
George Will is not just a partisan hack. He’s the guy who prepped Ronald Reagan for the 1980s debate while knowingly using Jimmy Carter’s stolen briefing books. So, it is with some surprise that I note that he is calling for a breakup of the big banks: With his chronically gravelly voice and relentlessly liberal …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1142,998,1004,1020,978,985,979],"tags":[],"class_list":["post-183496","post","type-post","status-publish","format-standard","hentry","category-barack-obama","category-congress","category-finance","category-legislation","category-politics","category-regulation","category-wanker"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/183496"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=183496"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/183496\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=183496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=183496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=183496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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George Will is not just a partisan hack. He’s the guy who prepped Ronald Reagan for the 1980s debate while knowingly using Jimmy Carter’s stolen briefing books.<\/p>\n