Steven Rosenfeld on Gerrymander Ruling, Nathan Schneider on Alternative Economic Visions view post on FAIR.org MP3 Link The original Gerrymander. This week on CounterSpin : Corporate media often indulge in feel-goodism around Independence Day, presuming a shared, uncontested meaning attached to the day’s symbols, when for many the holiday in fact evokes the excoriating words of Frederick Douglass, who asked in 1852: “What to the American slave, is your 4th of July? I answer: a day that reveals to him, more than all other days in the year, the gross injustice and cruelty to which he is the constant victim. To him, your celebration is a sham; your boasted liberty, an unholy license.” The distance between the democracy media talk about and the system we have is wrenching—and a recent Supreme Court ruling highlights right-wing efforts to increase that gap and set it in stone. We’ll talk about what the Court’s recent gerrymandering decision means for the whole idea of “one person/one vote” with Steven Rosenfeld, editor and chief correspondent at the Independent Media Institute’s Voting Booth project, and author of, most recently, Democracy Betrayed: How Superdelegates, Redistricting, Party Insiders and the Electoral College Rigged the 2016 Election . MP3 Link (cc photo: Magic Trax) Also on the show: As ugly as much of US history is, it isn’t just one story. What we choose to remember or forget shapes our present possibilities. The financial crisis, for instance, is remembered as banks deemed “too big to fail” inflicting great harm on families and the economy; but there was another story, too—about some financial institutions, namely credit unions, that behaved differently. Last fall, CounterSpin talked about that, as part of a kind of hidden economic history with journalist Nathan Schneider, author of Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy. We revisit that forward-looking conversation this week. MP3 Link

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Jane Mayer and Ronan Farrow | The FBI Probe Ignored Testimonies From Former Classmates of Kavanaugh

04 October 18 AM It's Live on the HomePage Now: Reader Supported News Jane Mayer and Ronan Farrow | The FBI Probe Ignored Testimonies From Former Classmates of Kavanaugh  Jane Mayer and Ronan Farrow, The New Yorker Excerpt: "Frustrated potential witnesses who have been unable to speak with the F.B.I agents conducting the investigation into sexual-assault allegations against Donald Trump's Supreme Court nominee, Brett Kavanaugh, have been resorting to sending statements, unsolicited, to the Bureau and to senators, in hopes that they would be seen before the inquiry concluded." READ MORE Sen. Bernie Sanders. (photo: Getty) Bernie Sanders to Launch New Plan to Break Up Wall Street Giants, Including Goldman Sachs and JP Morgan Jeff Stein, The Washington Post Stein writes: "Sen. Bernie Sanders (I-Vt.) on Wednesday unveiled legislation that would place a hard cap on the size of financial institutions, a proposal that would splinter Wall Street's biggest firms in an effort to ward off future taxpayer bailouts." READ MORE Activists gather outside the U.S. Supreme Court to hold a vigil in opposition to US Supreme Court nominee Brett Kavanugh. (photo: Reuters) Hundreds of Law Professors Sign Letters Rejecting Kavanaugh Nomination Jon Swaine, Guardian UK Swaine writes: "Hundreds of US law professors are urging the Senate to reject Brett Kavanaugh's supreme court nomination because of his conduct at last week's hearing on sexual misconduct allegations." READ MORE Voters fill out their ballots. (photo: Amber Arnold/AP) Cook Report: Eight More GOP Seats Move Towards Democrats David Wasserman, Cook Political Report Wasserman writes: "Five weeks out, several personally popular Republicans who appeared to be defying the "blue wave' in Clinton-won districts are beginning to see their leads erode." READ MORE Brett Kavanaugh. (photo: Carolyn Kaster/AP) Senate Democrats Suggest There's Something Fishy in Kavanaugh's Past Background Checks Jack Crosbie, Splinter News Crosbie writes: "According to Republicans on the Senate Judiciary Committee, there's nothing in any of those reports that relates to alcohol abuse or sexual misconduct. According to Democrats on the Senate Judiciary Committee, that's not true." READ MORE Supporters of temporary protected status for immigrants hold signs and cheer at a March 12 rally before a news conference announcing a lawsuit against the Trump administration. (photo: Jeff Chen/AP) Federal Judge, Citing Trump 'Animus' Against Nonwhites, Blocks Removal of Haitians, Salvadorans and Others Meagan Flynn, The Washington Post Flynn writes: "A federal judge in California temporarily blocked the Trump administration's plans to terminate the legal status of about 300,000 immigrants who fled violence and disaster in Haiti, Sudan, Nicaragua and El Salvador." READ MORE The frame of this picture can only take in a small part of the CF Industries nitrogen complex in Donaldson, Louisiana. (photo: Julie Dermansky/Getty) Our Fertilizer Is Killing Us. Here's a Fix. Nathanael Johnson, Grist Johnson writes: "Now, for the first time in over a hundred years, there's a potential solution. A pack of startups is racing to market with a means of fixing nitrogen without polluting the Earth." READ MORE Contribute to RSN Become a Fan of RSN on Facebook and Twitter Update My Monthly Donation

RSN: Nomi Prins | Dear President Trump: Breaking Up (Banks) Isn't So Hard to Do

10 June 17 It's Live on the HomePage Now: Reader Supported News RIGHT NOW WE HAVE NO DONATIONS COMING AT ALL: As of this morning we have nothing coming in whatsoever. Unfortunately we are going to have to divert our attention away from reporting to chase down the few donations it takes to make this work. This is a great system with a little participation. / Marc Ash - Founder, Reader Supported News Sure, I'll make a donation! The People's Summit: From Resistance to Power This weekend, Reader Supported News will be bringing you coverage of the People's Summit in Chicago. SEE MORE FOCUS: Nomi Prins | Dear President Trump: Breaking Up (Banks) Isn't So Hard to Do Noms Prins, TomDispatch Prins writes: "Donald, listen, whatever you've done so far, whatever you've messed up, there's one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster! And it isn't even hard to grasp or complicated to do. It's simple, in fact. Reinstitute the Glass-Steagall Act. Let me explain." READ MORE Contribute to RSN Become a Fan of RSN on Facebook and Twitter Update My Monthly Donation

RSN: Bernie Sanders | Here's What I'll Do the Day After the Election

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URGENCY AND PROGRESS - HELP FOLKS! - We are making the best progress on donations we have made all month at this point. Still the vast majority of those who have come to Reader Supported News this month have not contributed. Give us a hand - today, please. With urgency. / Marc Ash - Curator, Reader Supported News

Sure, I'll make a donation!

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FOCUS: Bernie Sanders | Here's What I'll Do the Day After the Election 
 
Bernie Sanders, The Boston Globe 
Sanders writes: "I am currently working as hard as I can to see that Donald Trump is defeated, that Hillary Clinton is elected president, and that Democrats gain control of the US House and Senate." 
READ MORE

 am currently working as hard as I can to see that Donald Trump is defeated, that Hillary Clinton is elected president, and that Democrats gain control of the US House and Senate. The day after the election, working with millions of grass-roots activists, I intend to do everything possible to make certain that the new president and Congress implement the Democratic platform, the most progressive agenda of any major political party in the history of the United States.

That agenda includes overturning the disastrous Supreme Court decision on Citizens United, raising the minimum wage to $15 an hour, expanding Social Security, breaking up “too-big-to-fail banks,” making public colleges and universities tuition-free for the middle class, and rebuilding our crumbling infrastructure. It also includes pay equity for women, a new approach toward trade, aggressive action to combat climate change, raising taxes on the wealthy and large corporations, lowering prescription drug prices, a significant movement toward universal health care, and major reforms in our criminal justice and immigration systems.

If this election has taught us anything, it is that the American people are sick and tired of the economic, political, and media status quo. They are tired of a rigged economy in which millions work longer hours for lower wages while 52 percent of all new income goes to the top 1 percent. They are tired of billionaires like Trump and large profitable corporations not paying a nickel in federal income taxes while the middle class pays their fair share to support governmental services. They are tired of a corrupt campaign finance system that allows billionaires like the Koch brothers, Sheldon Adelson, and others to spend hundreds of millions to elect candidates who will represent the wealthy and the powerful. They are tired of corporate media that focus on political gossip and look at elections as personality contests, rather than provide for a serious discussion of the major crises facing our country.

The anger and frustration of the American people, all across the political spectrum, is palpable. They want a government that represents the needs of working families and not just billionaires. They want bold action to rebuild the shrinking middle class, not inside-the-beltway palliatives written by corporate lobbyists.

At a time of massive political discontent, when millions not only are contemptuous of the major political parties but also are actually giving up on democracy, we need a new administration that has both vision and courage. We need vision from the top to point the way toward a new America that is more inclusive and egalitarian — which boldly addresses income and wealth inequality, poverty, and the needs of the uninsured. We need an administration that has the courage to take on the powerful special interests — corporate America, Wall Street, the insurance and drug companies, the fossil fuel industry — who stand in the way of real change and whose greed is destroying this country.

There is no moral excuse for the top one-tenth of 1 percent owning as much wealth as the bottom 90 percent, for one family (the Waltons) having more wealth than the bottom 42 percent of our population, for the number of billionaires increasing by ten-fold since 2000 while we continue to have the highest rate of childhood poverty of almost any industrialized country on earth.

There is no rational reason why we remain the only major country not to guarantee health care to all as a right or provide paid family and medical leave, or why we have more people in jail than any other country on earth at the same time as we have outrageously high levels of youth unemployment in minority communities.

Too many Americans are living in despair and hopelessness. Too many of our brothers and sisters are turning to drugs, alcohol and suicide to avoid the painful economic realities of their lives. Too many others are turning to rage and bigotry as they try to make sense of their declining standard of living.

At a time of hateful political division, a new president can bring our people together by leading and appointing an administration that will fight for working people. We need a secretary of treasury who is prepared to take on the greed and illegal behavior of Wall Street, not someone who comes from Wall Street or will leave office to go to Wall Street. We need a trade representative who understands that our current trade policies have failed, and that we must adopt a trade approach that represents workers and not the CEOs of large corporations. We need an attorney general who is prepared to vigorously enforce antitrust laws and prosecute bankers and corporate leaders who break the law.

This is a historic and pivotal moment in American history. Now is the time for our next president to rally the American people against Wall Street and corporate greed and stand up vigorously for the declining middle class.

http://readersupportednews.org/opinion2/277-75/39957-focus-heres-what-ill-do-the-day-after-the-election

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RSN: Elizabeth Warren | 5 of Country's Biggest Banks Are Still Too Big to Fail , We Just Crushed the Global Record for Hottest Start of Any Year, US Report on Saudi Arabia Downplays Civilian Casualties in Yemen

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Elizabeth Warren | 5 of Country's Biggest Banks Are Still Too Big to Fail 
 
Elizabeth Warren, Elizabeth Warren's Facebook Page 
Warren writes: "Federal regulators concluded yesterday that five of the country's biggest banks are still - literally - Too Big to Fail." 
READ MORE

Rosario Dawson Arrested During Democracy Spring Protest on Capitol Hill 
Denis Slattery, New York Daily News 
Excerpt: "Actress and big-time Bernie Sanders backer Rosario Dawson was busted in Washington, D.C., Friday during a rally calling for money to be taken out of politics." 
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Sanders' Tax Returns Show Charitable Giving, Comparatively Modest Income 
Toby Eckert and Hanna Trudo, Politico 
Excerpt: "Democratic presidential candidate Bernie Sanders released his 2014 tax returns Friday night, showing that he paid $27,653 in federal taxes on adjusted gross income of $205,271." 
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How Technology Helps Creditors Control Debtors 
Sarah Jeong, The Atlantic 
Jeong writes: "Not everyone can afford to plunk down hundreds, or even thousands, of dollars on a laptop. And not everyone has to: There are rent-to-own computers, offered by rent-to-own outlets alongside refrigerators, televisions, and furniture." 
READ MORE

US Report on Saudi Arabia Downplays Civilian Casualties in Yemen 
Alex Emmons, The Intercept 
Emmons writes: "In its annual human rights report on Saudi Arabia, the State Department ignored thousands of civilian casualties from the Saudi-led bombing campaign in Yemen and overlooked the widespread use of illegal cluster munitions by the bombing coalition." 
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4 Different Police Forces Helped Disappear the 43 Ayotzinapa Students 
teleSUR 
Excerpt: "A total of four different police forces, including federal agents, were involved in the enforced disappearance of the 43 Ayotzinapa students, according to new findings from Mexico's National Human Rights Commission." 
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We Just Crushed the Global Record for Hottest Start of Any Year 
Joe Romm, ThinkProgress 
Romm writes: "NASA reports that this was the hottest three-month start (January to March) of any year on record. It beat the previous record - just set in 2015 - by a stunning 0.7°F (0.39°C). Normally, such multi-month records are measured in the hundredths of a degree." 
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RSN: Bernie Sanders Calls for a 'Moral Economy' at the Vatican, Is US-Funded Destabilization in Latin America Now Paying Off?, Fracking Wells Released Over 5 Billion Pounds of Methane in One Year

Reader Supported News | 16 April 16

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Why Are You Here?

Why have you chosen to be and stay here with Reader Supported News? It means something to you, no? This organization is underfunded ... Because 1% of the subscribers can't bring themselves to respond to the fundraising appeals!? That's crazy.

"Be here," we need you.

Marc Ash 
Curator, Reader Supported News

Sure, I'll make a donation!

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Elizabeth Warren Has Basically Had It With Paul Krugman's Big Bank Nonsense 
 
Zach Carter, Reader Supported News 
Carter writes: "Sen. Elizabeth Warren appeared to offer a thinly veiled rebuke of liberal economist Paul Krugman on Wednesday by highlighting a 'scary' too-big-to-fail ruling from federal bank regulators." 
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Bernie Sanders Calls for a 'Moral Economy' at the Vatican 
teleSUR 
Excerpt: "Democratic presidential candidate Bernie Sanders spoke on economic justice alongside Latin American leaders such as Ecuador's Rafael Correa and Bolivia's Evo Morales at the Vatican on Friday." 
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The New Gilded Age: Close to Half of All Super PAC Money Comes From 50 Donors 
Matea Gold and Anu Narayanswamy, The Washington Post 
Excerpt: "A small core of super-rich individuals is responsible for the record sums cascading into the coffers of super PACs for the 2016 elections, a dynamic that harks back to the financing of presidential campaigns in the Gilded Age." 
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Time Magazine Is Lying to You. Here's Why. 
Alan Pyke, ThinkProgress 
Pyke writes: "Time Magazine is lying to you. The cover of the venerated publication's newest issue sports a shocking warning with an all-red klaxon cover that shouts: 'DEAR READER: You owe $42,998.12.' The article in question argues that America's national debt is so large that our government must stop spending so much money. This is false." 
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ACLU Sues Bureau of Prisons Over Missing Torture Documents 
Alex Emmons, The Intercept 
Emmons writes: "The ACLU sued the Federal Bureau of Prisons on Thursday for documents related to its inspection of a CIA black site in 2002." 
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Is US-Funded Destabilization in Latin America Now Paying Off? 
Francisco Dominguez, teleSUR 
Dominguez writes: "Riots, street demonstrations, anti-corruption campaigns, protests about the impact of the world economic crisis, general strikes, impeachment efforts, economic sabotage, and the like, have become the battle horses on which oligarchic forces in cahoots with Washington are riding to carry out 'regime change' in various Latin American countries." 
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Fracking Wells Released Over 5 Billion Pounds of Methane in One Year 
Xian Chiang-Waren, Grist 
Chiang-Waren writes: "Frackers have used billions of pounds of cancer-causing chemicals in at least 137,000 wells from 2005 to 2015." 
READ MORE

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Statement from Senator Warren on Rejection of Banks' "Living Wills" by Fed and FDIC

APR 13, 2016

Washington, DC - United States Senator Elizabeth Warren released the following statement today:

"Eight years ago, Too Big to Fail banks sparked a financial meltdown, then sucked up hundreds of billions of dollars in taxpayer bailouts.  Today, after an extensive, multi-year review process, federal regulators concluded that five of the country's biggest banks are still - literally - Too Big to Fail.  They officially determined that five US banks are large enough that any one of them could crash the economy again if they started to fail and were not bailed out.

"This announcement is a very big deal.  It's scary.  And it means that, unless these banks promptly address the concerns identified by the regulators, the government must push these banks to get smaller and less complex.  

"The announcement also dramatically demonstrates the danger of taking our focus off the big banks as we think about how to prevent the next major crisis.  

"There's been a lot of revisionist history floating around lately that the Too Big to Fail banks weren't really responsible for the financial crisis.  That talk isn't new.  Wall Street lobbyists have tried to deflect blame for years.  But the claim is absolutely untrue.

"There would have been no crisis without these giant banks.  They encouraged reckless mortgage lending both by gobbling up an endless stream of mortgages to securitize and by funding the slimy subprime lenders who peddled their miserable products to millions of American families.  The giant banks spread that risk throughout the financial system by misleading investors about the quality of the mortgages in the securities they were offering. The Financial Crisis Inquiry Commission (FCIC) spent years looking into the causes of the crisis and concluded that 'collapsing mortgage-lending standards and the mortgage securitization pipeline lit and spread the flame of contagion and crisis.'

"Big bank executives got rich off that pipeline, but when it all predictably - yes, predictably - blew up, the government lavished their institutions with billions in taxpayer bailouts.  None of those executives lost their jobs in exchange for the taxpayer rescue, and none of them went to jail for the rampant illegal activity that has been subsequently uncovered by the Department of Justice in bank settlement after bank settlement after bank settlement.  Some of them, like Jamie Dimon at JPMorgan Chase - whose bank was tagged as a continuing threat to the economy today - are still running the same banks. 

"Revisionist history is dangerous because it can blind us in the present - and bind us in the future. As the FCIC wrote, 'If we do not learn from history, we are unlikely to fully recover from it.' Today's announcement should remind us of the central role that the big banks played in the last crisis - and it is a giant, flashing sign warning us about the central role they will play in the next crisis unless both Congress and our regulators show some backbone, stand up to the revolving door culture that is pervasive in Washington, resist the millions spent on Wall Street lobbying and campaign contributions, and demand real changes at these banks.  Today, our top regulators warned us about the danger of the biggest banks - and we would be foolish to ignore their warnings."

https://www.warren.senate.gov/?p=press_release&id=1112

POSTED ON LINK:

Federal regulators concluded yesterday that five of the country’s biggest banks are still — literally — Too Big to Fail. Five US banks are officially large enough that any one of them could crash the economy again if they started to fail and weren’t bailed out. One of those banks was JPMorgan Chase. What was the reaction of JPM’s CEO, Jamie Dimon? He sent a note to his staff saying, “I want you all to know that you did an unbelievable job.”

"Unbelievable"? Yes, completely and totally unbelievable that JPM could help crash the economy, suck down a giant bailout, discover a London Whale that hid $6 billion in losses, get tagged by the FDIC and the Fed as Too Big to Fail, AND then pat each other on the back and say "heckuva job." That is the definition of "unbelievable" in the real world — but it’s business as usual in the cozy world of Wall Street.

RSN: Matt Taibbi | Why the Banks Should Be Broken Up

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FOCUS: Matt Taibbi | Why the Banks Should Be Broken Up 
 
Matt Taibbi, Rolling Stone 
Taibbi writes: "Paul Krugman wrote an op-ed in the New York Times today called 'Sanders Over the Edge.' He's been doing a lot of shovel work for the Hillary Clinton campaign lately, which is his right of course. The piece eventually devolves into a criticism of the character of Bernie Sanders, but it's his take on the causes of the '08 crash that really raises an eyebrow." 
READ MORE

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Bernie or no Bernie, 'Times' columnist Paul Krugman is wrong about the banks

aul Krugman wrote an op-ed in the New York Times today called "Sanders Over the Edge." He's been doing a lot of shovel work for the Hillary Clinton campaign lately, which is his right of course. The piece eventually devolves into a criticism of the character of Bernie Sanders, but it's his take on the causes of the '08 crash that really raises an eyebrow.

By way of making a criticism of the oft-repeated Sanders charge that the big banks need to be broken up, Krugman argues that banks were not "at the heart of the crisis."

This is Krugman's assessment of who was responsible:

"Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on 'shadow banks' like Lehman Brothers that weren't necessarily that big."

Forget about the Sanders-Clinton race, because it's irrelevant to the issue. Krugman is just wrong about this.

The root problem of the '08 crisis lay in a broad criminal fraud scheme in the mortgage markets. Real-estate agents fanned out into middle- and low-income neighborhoods in huge numbers and coaxed as many people as possible into loans, whether they could afford them or not.

Those loans in turn were bought up by giant financial companies on Wall Street, who chopped them up into a kind of mortgage hamburger. Out of this hamburger, they made securities. These securities were then sold to institutional investors like pension funds, unions, insurance companies and hedge funds.

In the typical scenario, the investors buying these toxic mortgage securities weren't told how risky the merchandise was. Many thought they were investing in AAA-rated real estate, when in fact they were buying up the flimsy home loans of part-time janitors, manicurists, strawberry pickers, people without ID or immigration status, and so on.

There were two major classes of victims in this scheme: homeowners and investors. About five million people went into foreclosure after the crash, and investor losses globally ran into the trillions. It was an unparalleled event in the annals of white-collar crime.

Virtually the entire financial industry had a hand in this. The ratings agencies were complicit because they blessed a lot of these mortgage securities with high ratings when they knew they didn't deserve them. Companies like AIG had a role because they created a kind of pseudo-insurance for these mortgage securities that disguised the risk they posed.

And Krugman is right that companies like Countrywide and First Century, the sleazy "mortgage originators" who sent teams of over-caffeinated real-estate hustlers into neighborhoods offering crooked loans, were primarily responsible for a lot of the street-level predatory lending.

But Krugman neglects to mention the crucial role that big banks played.

The typical arc of this scam went as follows: Giant bank lends money to sleazy mortgage originator, mortgage originator makes lots of dicey home loans, the dicey home loans get sold back to the bank, the bank pools and securitizes the loans, and finally the bank sells the bad merchandise off to an unsuspecting investor.

The criminal scenario that was most common was a gigantic bank buying up huge masses of toxic loans from a Countrywide or some other fly-by-night operation and knowingly selling this crap as a good investment to some investor.

We chronicled an example of this in "The $9 Billion Witness," the story of JP Morgan Chase whistleblower Alayne Fleischmann, who lost her job after trying to stop the bank from selling a parcel of bad mortgages. JP Morgan Chase ended up saddled with a $13 billion settlement after it admitted to making "serious misrepresentations" to mortgage investors.

What's so baffling about Krugman's column is that there is a massive amount of documentary evidence outlining this behavior, committed by virtually every major bank in America. There was a $7 billion settlementpaid by Citigroup, which incidentally is the company that Bill Clinton originally repealed the Glass-Steagall Act to create. Citi admitted to hawking merchandise that violated their own internal credit guidelines.

Citi also bilked investors out of huge sums, and we know a great deal about its behavior because it too had a whistleblower, named Richard Bowen. Bowen sent the SEC over 1,000 pages documenting "fraud and false representations given to investors."

There were virtually identical billion-dollar settlements involving Bank of America, Goldman Sachs(which is now a bank holding company, remember) and Morgan Stanley (ditto).

Wells Fargo's settlement is another blunt repudiation of Krugman's point, because in the case of Wells, the bank itself was engaging in predatory lending at the street level, not just selling crappy mortgages to investors.

Wells had to pay $175 million to settle charges of overcharging 4,000 minority homeowners in a case that saw evidence come out that the bank specifically targeted black customers (referred to in one office as "mud people") for "ghetto loans."

Let's not forget also that not only were the big banks intimately involved in the signature fraud of the era — the creation and repackaging of toxic mortgage loans — they were also involved in wide-ranging foreclosure abuses.

Companies like Bank of America, Citi, Wells Fargo and Chase ended up being stuck with an additional $25 billion settlement just for the tawdry document-fudging "robosigning" scheme that helped accelerate the foreclosure crisis. 

And did Krugman miss the other headlines from this era? Did he miss HSBC being nailed forlaundering hundreds of millions of dollars for Central and South American drug cartels? How about the money-laundering scandals involving Chase, the British Bank Standard Chartered, the German Commerzbank AG and others, in which banks washed cash for crooks and rogue states?

And did he miss the LIBOR rate-rigging scandal that forced the likes of Barclays, UBS, Rabobank, the Royal Bank of Scotland, and Deutsche Bank to pay massive settlements for manipulating interest rates? How about the Forex manipulations that led to still more settlements for the likes of Goldman, BNP Paribas, HSBC and Barclays?

Krugman would likely argue that all those little things like laundering money for narco-terrorists, monkeying with world interest rates, and systematic cheating in the currency markets had nothing to do with the crash.

He would technically be correct in this. But the entire argument for breaking up the banks, which incidentally didn't originate in the Senate with Bernie Sanders or even Elizabeth Warren but with Ohio's Sherrod Brown and then-Delaware Sen. Ted Kaufman, was conceived with the idea that leaving over-large banks intact invited not only the potential for future bailouts, but future regulatory problems.

As MIT economist Simon Johnson pointed out in 2010, these institutions have become so big that they can confront and defy the government. Moreover the failure to punish the banks for the great mortgage frauds of the crisis years left all of these companies with the knowledge that the authorities were afraid to aggressively enforce the law, for fear of disrupting a fragile economy.

When UBS and HSBC escaped with slap-on-the-wrist settlements for the LIBOR and money-laundering offenses, respectively, Sherrod Brown redoubled his efforts to break up the banks, insisting that these episodes proved these companies were now too big to be regulated. By 2013, Brown said, it was clear that "these megabanks are out of control."

The call to break up the banks is not some socialist clarion call to end capitalism. (Well, it might be from Bernie, but not from everyone.)

In fact, it's just the opposite. The lessons of the crash era are that these megabanks have grown beyond the organic controls of capitalism. They were so big and so systemically important in '08 that the government could not let them go out of business.

This alone was an argument for breaking them up. The banks emerged from '08 with the implicit backing of the federal government. They became quasi-state entities, almost immune to failure. Not just Bernie Sanders worried about this. Voices as diverse as Louisiana Republican David Vitter and Krugman's own New York Times editorial board have argued for hard caps on bank size.

What's happened in more recent years, with LIBOR and the money-laundering scandals and Forex and the London Whale episode and so on, is that these firms also proved too "systemically important" to regulate and prosecute. They grew too big not only for capitalism, but for criminal law.

When a company is not only too big to fail, but too big to prosecute, it's too big to exist. Krugman may believe otherwise, but he shouldn't pretend that others – including his own paper – don't have legitimate concerns.

http://readersupportednews.org/opinion2/277-75/36222-focus-why-the-banks-should-be-broken-up