Four Reasons Why Wall Street Should Be Fearing The Bern
Are big bankers quaking in their Ferragamo loafers? They better be.
In Bernie Sanders, we at last have a presidential candidate who is fed up with an economy that has been manipulated by Wall Street to benefit the very wealthiest Americans at the expense of working families. Sanders has a bold plan to overhaul the status quo, and it’s resonating with the American people.
Members of my union, the Communications Workers of America (CWA), will be working to make that vision a reality, in the streets and at the polls. Last month, our members endorsed Sanders for president, and one of the key reasons he got our backing was his plan to tackle income equality — starting with reining in Wall Street. Sanders’s latest “greed is no good” speech was further proof that CWA backed the right candidate.
His Wall Street reforms closely align with CWA’s own program to create an economy that works for all — not just the 1 percent — on four issues:
1. Establish a tax on Wall Street speculators
Think of it as a sales tax for Wall Street. Today, working families pay taxes every time we buy a sandwich for lunch or a new pair of winter boots. Yet, Wall Street doesn’t pay a dime on its trades and other transactions.
CWA believes that to prevent a future financial crisis, we must establish a financial speculation tax. It’s a very small fee on the sale of stocks, bonds, derivatives and other securities. The tax would amount to something in the range of 10 cents to 50 cents per $100 of stock or other securities sold. But since hundreds of billions of dollars of financial transactions take place each day, this tiny tax would raise billions of dollars for our economy.
On top of it all, taxing individual trades would encourage people to stop wasteful trading, curbing market volatility. No more excessive speculation that triggers wild swings.
Sanders endorses this tax too, and under his plan, this revenue will go toward making public colleges and universities tuition free. As he said, “During the financial crisis, the middle class of this country bailed out Wall Street. Now, it’s Wall Street’s turn to help the middle class.”
2. Offer banking services at post offices
Americans need more affordable banking options. Sanders knows this and so does CWA.
Nearly 28 percent of American households live in communities that are underserved or completely denied service by traditional banks. Through no fault of their own, these vulnerable families are forced to turn to payday lenders, check cashing operators and other financial predators that charge outrages fees and triple-digit interest rates on loans.
That’s why CWA is among 27 organizations that support postal banking. The idea is that the United States Postal Service (USPS) can provide low-cost, consumer-driven financial services, including payroll check cashing, bill payment, savings accounts and small loans to its consumers. With 31,000 branches, post offices are in almost every community.
Recently we joined the American Postal Workers Union in delivering 150,000 petition signatures to USPS headquarters in the nation’s capital, calling on the Postmaster General to act now.
3. Break up the big banks
You hear Sanders say it at just about every rally, speech and debate: We must end “too big to fail.” In his words, “If a bank is too big to fail, it is too big to exist.”
CWA wholeheartedly agrees with his plan to break up commercial banks, shadow banks and insurance companies that pose a threat to the US economy should they suddenly go up in flames. In 2008, taxpayers bailed out the faltering big banks — and today they’re bigger than ever. We refuse to be on the hook again for Wall Street’s risky investments and failed get-rich schemes. We refuse to an accessory to the formation of massive financial institutions that use their economic and political clout to demand bailout after bailout.
Bigger does not mean better. Public banks in North Dakota have outperformed Goldman Sachs. So much for big.
4. Restore Glass-Steagall
CWA and Sanders are both strong advocates for the reinstatement of a 21st Century Glass-Steagall Act.
Congress passed the original legislation in 1933 to separate ordinary commercial banking from risky investment banking. That meant the Main Street banks that took your deposits and gave loans to small businesses couldn’t also be in the Wall Street game of selling stocks and corporate mergers.
Yet, as part of a shortsighted deregulatory push, it was repealed in 1999. This paved the way for American banks to merge and acquire one another, growing bigger and bigger. Soon they were “too big to fail,” and there were too many ways banks could use ordinary depositor funds for risky investment ventures. That greed and recklessness that caused the Great Recession in late 2007, devastating the lives of millions of American workers. Many haven’t yet recovered.
Sanders says, “The reality is that Congress doesn’t regulate Wall Street. Wall Street, its lobbyists and their billions of dollars regulate Congress. We must change that reality, and as president I will.”
Millions of Americans are counting on it.
