Senator Bernie Sanders Says Big Banks Regulate What Congress Does, Except for Dodd-Frank, Apparently

Independent Vermont Senator Bernie Sanders joined MSNBC’s The Ed Show last night to talk about “too big to fail" banks, and whether JP Morgan’s $2 billion trading loss could be used to get more regulations passed through Congress. Sanders explained to Ed Schultz that “the truth is that Wall Street regulates the Congress” and that “the big banks regulate what Congress does.”

Except, apparently, when it comes to Dodd-Frank, which Sanders said “was a step forward” but “did not go far enough” (maybe because much of it is still TBA or because its so complex even its supporters don't understand it). That the big banks would spend their "unlimited amounts of money" to get the deregulation they want but then sit on their thumbs while Dodd-Frank was becoming law just doesn’t pass the smell test. The truth is deregulation did not create “too big to fail” the way the liberal orthodoxy would like to have it. Anthony Randazzo aptly debunked that myth almost three years ago and Sanders, and Schultz, ought to give it a read.

Christopher Whalen, meanwhile, traced the “too big to fail” phenomenon through American history in his book Inflated:

The Latin Debt crisis [of the 1970s and 80s] illustrates how Paul Volcker and many of his contemporaries laid the intellectual and practical foundations for policies such as "too big to fail" for the largest banks. The tendency to bail out large financial institutions and eventually whole countries in the 2008-2010 period dates from the late 1970s and the tenure of Paul Volcker at the Fed and James Baker at Treasury. Whether one speaks of the WWI and WWII loans to Europe or the bad foreign debts of the largest banks, Washington's tendency in the twentieth century was to paper over the problem with more debt and inflation.

American history is littered with bank bailouts and government-created moral hazard. Calling for more regulation of Wall Street might be a crowd-pleaser, but it’s counterproductive if your goal is to stem “too big to fail”, nurtured as it was by some of the same regulations of which Washington now wants more. But it’s so much easier to just blame everyone else!

Instead of the rest of the Sanders video, here's Reason TV with Tom Easton explaining why Dodd-Frank is a terrible law (he says "the single most indicting read on Dodd-Frank is to read Dodd-Frank itself," how many Congressmen do you think have?)

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • SugarFree||

    Brought to you by Vermont, trading status as the whitest state back and forth with Maine for decades now.

  • ||

    Considering that Bernie's a real honest-to-god socialist and not just some namby-pamby social democrat, what he really thinks is that the banks should be nationalized.

  • BakedPenguin||

    Bernie Sanders: a man for today, an ideology for the late 19th century.

  • o3||

    so did alexander hamilton

  • ||

    No, he didn't. In fact it was even his proposal that the First Bank of the United States would be a private company. He was, however, OK with the government owning shares in it.

  • widget||

    As a CA resident, my self-esteem goes up a microtick when I'm reminded that Vermont has a senator dumber than Barbara Boxer.

  • Sevo||

    "Vermont has a senator dumber than Barbara Boxer."
    Boy, I'd like to believe that's true, but Boxer sets a difficult standard to beat.

  • widget||

    Bernie Sanders doesn't write romance novels, or get someone to do that for him, in his spare time.

    http://www.amazon.com/A-Time-R.....B000W7FBBE

  • ||

    Actually, I see no evidence that Sanders is dumb. The people who vote for him, now, that's a different story.

    All Bernie is doing is meeting people's need to be promised free ponies. And explaining to them how the evil capitalists are keeping them from getting them.

  • VG Zaytsev||

    Babs is way dumber than Bernie.

    And just as evil.

  • CockGobbla||

    Is there any American politician more clueless than Bernie Sanders?

  • ||

    "Is there any American politician more clueless than Bernie Sanders?"

    The idiots who wrote Dodd-Frank in the first place?

  • Fist of Etiquette||

    Independent Vermont Senator Bernie Sanders joined MSNBC’s The Ed Show-

    Stop right there.

  • T||

    The shadowy cabal of banksters that runs the country was powerless in the face of Chris Dodd and Barney Frank.

    Umm, sure. Those two can be (and have been) bought for chump change compared to what banks make.

    My senators, while not great, are certainly brighter than this schmuck.

  • Almanian...still||

    Shorter Bernie Sanders: derp

    the end

  • 0x90||

    I believe Sanders has a running segment on Thom Hartmann's show. Which basically means that in order to bring balance to the universe, Rick Santorum needs to get a regular spot on Alex Jones.

  • Nick M||

    I heard a segment on Hartmann's show with Sanders a couple of weeks ago or so where a caller asked what part of the constitution authorized ObamaCare. Sanders fumbled around a bit saying he wasn't exactly sure. Hartmann jumped in the to say the general welfare clause. Sanders agreed and that was that! Question answered.

  • Libertarian||

    Soooo........do I understand this right? JPMorgan, with sales of $60B a year and income of $17B loses $2B, and this is a crisis that calls for more regulation? As soon as its stock drops a few more points, I'm buying all I can (BTW, that ain't much).

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement