The Wall Street demonstrators are shining a light on one of the most serious problems facing the United States -- the greed and power of Wall Street. Now is the time for the American people to demand that the president and Congress follow that light -- and act. The future of our economy is at stake.
Here are several proposals from Sen. Bernie Sanders to rein in Wall Street.
1) If a financial institution is too big to fail, it is too big to exist. Today, the six largest financial institutions have assets equal to more than 60 percent of GDP. The four largest banks in this country issue two thirds of all credit cards, half of all mortgages, and hold nearly 40 percent of all bank deposits. Incredibly, after we bailed out these big banks because they were "too big to fail," three out of the four largest are now even bigger than they were before the financial crisis began. It is time to take a page from Teddy Roosevelt and break up these behemoths so that their failure will no longer lead to economic catastrophe and to create competition in our financial system.
2) Put a cap on credit card interest rates to end usury. Today, more than a quarter of all credit card holders in this country are paying interest rates above 20 percent and as high as 59 percent. When credit card companies charge 25- or 30-percent interest rates they are not engaged in the business of "making credit available" to their customers. They are involved in extortion and loan-sharking. Citigroup, Bank of America, and JP Morgan Chase should not be permitted to charge consumers 25- to 30-percent interest on their credit cards, especially while these banks received over $4 trillion in loans from the Federal Reserve.
3) The Federal Reserve needs to provide small businesses in America with the same low-interest loans it gave to foreign banks. During the financial crisis, the Federal Reserve provided hundreds of billions of dollars to foreign banks and corporations including the Arab Banking Corporation, Toyota, Mitsubishi, the Korea Development Bank, and the state-owned Bank of Bavaria. At a time when small businesses can't get the lending they need, it is time for the Fed to create millions of American jobs by providing low-interest loans directly to small businesses.
4) Stop Wall Street oil speculators from artificially increasing gasoline and heating oil prices. Right now, the American people are being gouged at the gas pump by speculators on Wall Street who are buying and selling billions of barrels of oil in the energy futures market with no intention of using a drop for any purpose other than to make a quick buck. Delta Airlines, Exxon Mobil, the American Trucking Association, and other energy experts have estimated that excessive oil speculation is driving up oil prices by as much as 40 percent. We have got to end excessive oil speculation and bring needed relief to American consumers.
5) Demand that Wall Street invest in the job-creating productive economy, instead of gambling on worthless derivatives. The American people have got to make it crystal clear to Wall Street that the era of excessive speculation is over. The "heads, bankers win; tails, everyone else loses" financial system must end. Most important, we need to create a new Wall Street that exists not to reward CEOs and investors for the bets they make on exotic financial instruments nobody understands. Rather, we need a Wall Street that provides financial services to small businesses and manufacturers to create decent-paying jobs and grow the economy by productive means. Think of all of the productive short- and long-term investments that could be made in our country right now if Wall Street used the money it has received from the federal government wisely. Instead of casino-style speculation, Wall Street could invest in high-speed trains; fuel-efficient cars; wind turbines and other alternative energy sources; affordable housing; affordable prescription drugs that save people's lives; and other things that America desperately needs. That is what we have got to demand from Wall Street.
6) Establish a Wall Street speculation fee on credit default swaps, derivatives, stock options and futures. Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street. Establishing a speculation fee would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and significantly reduce the deficit without harming average Americans. There are a number of precedents for this. The U.S had a similar Wall Street speculation fee from 1914 to 1966. The Revenue Act of 1914 levied a 0.2-percent tax on all sales or transfers of stock. In 1932, Congress more than doubled that tax to help finance the government during the Great Depression. And today, England has a financial transaction tax of 0.25 percent, a penny on every $4 invested.
"Making these reforms will not be easy," Sanders said. "After all, Wall Street is clearly the most powerful lobbying force on Capitol Hill. From 1998 through 2008, the financial sector spent over $5 billion in lobbying and campaign contributions to deregulate Wall Street. More recently, they spent hundreds of millions more to make the Dodd-Frank bill as weak as possible, and after its passage, hundreds of millions more to roll back or diluter the stronger provisions in that legislation."