President Trump: To Jumpstart the U.S. Economy, Please Honor Your Promise to Break Up the Big Banks!

Donald Trump and the Republican Platform Called for Restoring Glass-Steagall and Breaking Up the Too Big to Fails

The Republican platform under Donald Trump called for restoring the Glass-Steagall separation between traditional depository banking and speculative investment banking.  Trump himself has called for it.

This would lead to the break up of the giant banks.

The New York Times explains:

The Republican Party platform calls for breaking up the large banks by restoring the New Deal-era Glass-Steagall Act, which required a separation of investment from commercial banking.

The People Want Them Broken Up

As Minneapolis Fed President Kaskari points out, a lot of the populist anger which got Donald Trump elected is based on allowing the too big to fail banks to survive:

Mr. Kashkari said he traced some of the nation’s current political anger and polarization to how the government responded to the financial crisis — which allowed large banks to survive while thousands of Americans struggled to keep their homes and find new jobs.

“The bailouts violated a core belief that has been handed down from generation to generation in our society that if you take a risk you bear the rewards and consequences of that risk,” he said. “We had to tear that up during the crisis because the biggest banks were going to fail and bring down the U.S. economy. And when you violate the core beliefs of society it does lead to anger and a feeling that this wasn’t fair.”

Most Americans opposed the bailouts of the giant banks, and want them broken up.

Indeed, the IMF has warned that bank bailouts were so unpopular, that a revolution could occur if more bailouts were given.

So Do Economists and Financial Experts

Economists and financial experts from across the political spectrum agree that we’ve got to rein in the “too big to fail” banks.

Why do so many top bankers, economists, financial experts and politicians say that the big banks should be broken up?

Because they’re no longer acting like banks, and are destroying the economy.

The best way to jumpstart the economy would be to restore Glass-Steagall and break up the bloated banks.

Here’s a sample of economists and financial experts calling for the too big to fails to be broken up or dramatically reined in:

  • Current President of the Federal Reserve Bank of Minneapolis – who oversaw the Troubled Asset Relief Program (TARP) as Assistant Secretary of the Treasury for Financial Stability – Neel Kashkari
  • Current Vice Chair and director of the Federal Deposit Insurance Corporation – and former 20-year President of the Federal Reserve Bank of Kansas City – Thomas Hoenig (and see this)
  • Former Federal Reserve Bank of New York economist and Salomon Brothers vice chairman, Henry Kaufman
  • Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard
  • Former chief economist for the International Monetary Fund, Simon Johnson (and see this)
  • President of the Federal Reserve Bank of St. Louis, James Bullard
  • The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz
  • Economics professor and senior regulator during the S & L crisis, William K. Black
  • Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales
  • The Director of Research at the Federal Reserve Bank of Dallas, Harvey Rosenblum
  • Director, Max Planck Institute for Research on Collective Goods, Bonn, and Professor of Economics, University of Bonn, Martin Hellwig

And the head of the New York Federal Reserve Bank – and former Goldman Sachs chief economist – William Dudley says that we should not tolerate a financial system in which certain financial institutions are deemed to be too big to fail.

Federal Reserve Board governor Daniel Tarullo also backs a cap on the size of banks, and Former Treasury secretary under Reagan and George H.W. Bush, Nicolas Brady, says that we need to put a cap on leverage.

Top Bankers Call for Big Banks to Be Broken Up

While you might assume that bankers themselves don’t want the giant banks to be broken up, many are in fact calling for a break up, including:

  • Former managing director of Goldman Sachs – and head of the international analytics group at Bear Stearns in London- Nomi Prins
  • Numerous other bankers within the mega-banks (see this, for example)
  • Founder and chairman of Signature Bank, Scott Shay
  • Former Natwest and Schroders investment banker, Philip Augar
  • The President of the Independent Community Bankers of America, Camden Fine


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