Terminating Bailouts for Taxpayer Fairness Act of 2013 Act

This could be a giant leap for fairness, according to Matt Taibbi over at Rolling Stone:

Now, it looks like we’re headed for a real legislative confrontation. And man, is the finance sector freaking.

Last week, on April 24th, Democratic Senator Sherrod Brown of Ohio and Louisiana Republican David Vitter introduced legislation called the “Terminating Bailouts for Taxpayer Fairness Act of 2013 Act,” or the “Brown-Vitter TBTF Act” for short. The bill is a gun aimed directly at the head of the Too-Big-To-Fail beast.

If Matt Taibbi is excited about this it must be pretty big. In terms of banking regulations and actions, this Taibbi piece reads like a big old 1970′s bowl of Life cereal for Mikey. He likes it!

He goes on:

During the Dodd-Frank negotiations a few years ago, Brown teamed up with Delaware Democrat Ted Kaufman to introduce an amendment that would have physically capped the size of the biggest banks. The amendment was bold and righteous but was slaughtered on the floor by a 61-33 margin, undermined by leaders of both parties – 27 Democrats voted against it.

Brown-Vitter offers a different and, in a way, more elegant solution to the problem than Brown-Kaufman. Rather than impose size limits, it simply insists that banks with over $500 billion in assets maintain higher capital reserves than are currently required. Companies like J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup and Bank of America will have to keep capital reserves of about 15 percent, about twice the current amount.

The bill only has such tough requirements for just those few megabanks, which sounds unfair, except that the aim of the bill, precisely, is to level the playing field.

The Standard and Poor’s ratings agency basically came out against the bill in a report they called, ”Brown-Vitter Bill: Game-Changing Regulation For U.S. Banks” because it would, get this, cause harm to the banks’ creditworthiness if the government wasn’t there to prop them up, with the agency warning:

If congress enacts the bill as proposed, Standard and Poor’s Ratings Services would have concerns about the economic impact on banks’ creditworthiness stemming from the transition to substantially higher capital requirements.

So, ending Too Big Too Fail, according to Standard and Poor’s, would force the agency to downgrade the U.S. banking system, making the U.S. banking system less competitive, and would likely destabilize the global financial market. These are the anointed gate keepers of capitalism talking.

It’s funny how Capitalism works. Take away the government backing and it all falls down. That’s some system you’ve got there, Moochers & Takers.

According to S&P, ending Too Big To Fail would put an end to the veneer of capitalism that the ratings agency has been playing along with since long before the house of cards collapsed, and we’re supposed to continue to pretend that the financial sector isn’t a quadrillion dollar bullshit con operation run by professional grifters and multinational pirates of the high seas.

The nerve of these degenerate gamblers and their accomplices. By all means, let’s get government out of the lives of these proud people and their noble institution.

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  • Dennis Collins

    If I remember correctly, S&P was a willing partner in the improper rating of these poor misunderstood too big to fail folks. And now that there would be some much needed control, there going to call that a danger to the solvency or stability of those same folks!!!!! It’s nap time my head hurts! Heaven forbid anyone should take into account the average american taxpayer/consumer etc. and seek stability for them, NNNNNNNOOOOOOOOOO.
    Hey S&P Sit Down, Chill out and STFU. You’ve screwed us already, don’t get horny for more.

  • muselet

    As soon as Brown-Vitter was introduced, a very interesting thing happened. The Independent Community Bankers of America, or ICBA, issued a press release boosting the bill. “ICBA strongly supports this legislation,” the release read, “and urges all community banks to join the association in advocating passage of legislation to end too-big-to-fail.”

    This may be the most politically-astute action I’ve heard of in years. Politicians don’t care much about community banks—they’re too small to be reliable big-money campaign contributors—but can’t favor the big banks too obviously or they’ll give the game away. And voters may be easy to bamboozle, but they’re not going to forget which banks have behaved badly in their towns.

    –alopecia

  • http://www.politicalruminations.com/ nicole

    These banks desperately need to be cut down to size. I still feel that we should have nationalized the bastards back in 2009, but this is an awesome step towards stopping their rape of the American people.

  • D_C_Wilson

    ” By all means, let’s get government out of the lives of these proud people and their noble institution.”

    I’m sure our libertarian savior Randy Paul, will in the forefront of ending “too big to fail” and Bhahahahhahahahahhahahahahhaha!!!!!

    Sorry, almost managed to type that with a straight face.