Treasury Secretary Geithner proposed a $1 trillion plan to help Wall Street make a killing buying “toxic assets” with our tax dollars and guarantees. And he proposed a complex regulatory scheme to keep huge financial institutions from wrecking our economy once again.
But there’s a better and simpler solution: break up those huge financial institutions. If they’re “too big to fail,” then they’re too big to exist.
Returning to the banks and insurance companies that existed before the Reagan era would not hurt our economy. As Paul Krugman writes, “that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.”
Our friends at A New Way Forward have a plan:
NATIONALIZE: Insolvent banks that are too big to fail must incur a temporary FDIC intervention – no more blank check taxpayer handouts. (see Paul Krugman on nationalization)
REORGANIZE: Current CEOs and board members must be removed and bonuses wiped out. The financial elite must share in the cost of what they have caused. (see Simon Johnson on reorganizing)
DECENTRALIZE: Banks must be broken up and sold back to the private market with new antitrust rules in place – new banks, managed by new people. Any bank that’s “too big to fail” means that it’s too big for a free market to function. (see Mike Lux on decentralization)
Thank you for your consideration on this matter!