Wall Street vs. Main Street: Where do we go from here?

The anger, the tension, the real concern not only about the past abuses but
about the future permeated that hearing room. Sen. Carl Levin (D-Mich.), a 32-year
veteran of the upper chamber, isn’t exactly a bomb-thrower; nor is appointed
less-than-one-termer Ted Kaufman (D-Del.). Both are brilliant students of the
legislative process. Ted served as Joe Biden’s chief of staff and mentor to
many of us Senate aides, during his 20-plus years on Capitol Hill. Levin is
known for his deliberate and serious and substantive grasp of issues. Both are
problem-solvers.
 
And we have a big problem. Spelled with a capital BIG. According to Peter Boone
in The New Republic, the largest six
banks have assets greater that 63 percent of GDP; it was 55 percent in 2006 and
only 17 percent 15 years ago. The big four banks have half of the market for
mortgages and two-thirds of the market for credit cards. Five have 95 percent
of the market for those lovely gambling instruments known as over-the-counter
derivatives. And three banks have over 40 percent of the world market for stock
underwriting. This has transformed our economy, the world’s economy, in ways
few understand, and brought on the “too big to fail” label.
 
Is this really healthy for America’s economy, for the world’s economy?
 
Those are the precise questions that Sens. Levin and Kaufman and others are
asking. Many smaller banks have a dog in this fight too — get swallowed up or
get crushed. Some choice.
 
Kaufman proposes that no single bank could hold more than 10 percent of the
nation’s total deposits and a bank could have liabilities of no more that 2
percent of the nation’s gross domestic product. In addition, isn’t it time for
serious regulation instead of deregulation of this industry? Isn’t it time to
prohibit derivatives that are simply risky gambles with other people’s money?
 
It is time for Congress to act — to pass serious, common-sense legislation
proposed by Kaufman and Dodd and others. Then let’s keep the pressure on and
stop the bank behemoths from becoming even bigger and swallowing all of us.