Bernie and the Banks

Bloomberg reports:

Senator Bernie Sanders proposed legislation to break up the nation’s biggest banks, including JPMorgan Chase & Co. and Bank of America Corp., setting up a contrast with Hillary Clinton as both seek the Democratic presidential nomination.

One of the most interesting aspects of modern American politics is the amazing similarities between hot-button issues of the far left and the far right.  The solutions they offer are often wildly different, but the problems they complain about are surprisingly similar.

Conservatives are often seen as on the side of business and capitalism.  We are, but by "business and capitalism" we mean "free, fair, and open competition."  In our age of overwhelming government regulation, that means small business; due to regulatory capture, large businesses can all too often use their government connections to kneecap competitors and stifle innovation that might cut into their profits.

Nowhere is this more true than with big banks.  We see the results today, from the the death of the free checking account to the housing bubble in which banks were forced by government fiat to make loans to people who couldn't pay them back and were then bailed out at taxpayer expense by that same government.

What was the end result of all these machinations?  Bank mergers, forced by the government, resulting in ever-bigger corporations that are now too big to be allowed to fail no matter how poorly they serve their customers.  For all practical purposes, giant banks are an arm of the government without any of the democratic accountability to voters that should go with being part of government.

We've written previously that this is intolerable; banks that are too big to fail are too big to exist.  There's a reason we have anti-trust laws, the same reason these laws were put in place by Republican Teddy Roosevelt: if a market is captured by one or a handful of enormous companies, it's not competitive anymore and the public will be fleeced.

Possibly the most severe consequence of Republicans' traditional inability to string two words together into an intelligible argument is that most people think America is a capitalist country.  It's not, and hasn't been for quite a number of years.

Capitalism is a state of free and open competition, with everybody kept honest by an impartial government and customers free to reward vendors as they see fit.

What we have today bears no resemblance to capitalism at all.  Government buries every possible business activity under an avalanche of regulation that no small business can possibly hope to understand much less follow.  The government doesn't have enough inspectors to catch everybody, but the threat is always there if some politically connected competitor gives a bureaucrat the right poke.  A drug dealer's favorite way of dealing with competitors is ratting them out to the police; the same is true of giant corporations.

This isn't capitalism and it isn't competition; it's much more like fascism where private companies nominally own and operate everything but the government calls the tune.  It's enlightening to note that both the far right and the far left call our current government fascist; they're not entirely wrong.

Many issues identified by Socialist Bernie Sanders and the Occupy movement are, in fact, legitimate complaints.  The only trouble is that they often attack the wrong target.  They rail against liberty, business, capitalism, and freedom as a whole, instead of attacking government where all these problems originated.

When Sen. Sanders attacks big banks, that isn't an assault against freedom or business.  It's a rightful response to "companies" that don't compete but loot, using their bought politicians to keep taxpayer money flowing into their pockets.  It's not socialist to oppose this, nor is it conservative, it's simply American.

Banks have nothing to fear from Hillary Clinton; like Mr. Obama and Bill, she is friends with the super-rich and powerful and will do their bidding.  Mr. Obama appointed so many who'd previously worked for just one megabank, Goldman Sachs, that the place was known as "Government Sachs."  It sometimes seemed as if he'd outsourced financial regulation entirely.

Bernie Sanders is cut from different, more honest cloth.  In this specific instance, the far left has gone full circle and connected with the far right on the opposite side, and we both agree that the big banks are too big.

The political spectrum isn't a straight line.  As this issue illustrates, it's actually a circle, and we've looped 'round to the backside.  This election will be fascinating.