The Ed Show | May 16, 2012
>>> has one potential upside. it could be good timing, because regulators right now are writing a version of the volcker rule which could prevent this kind of risky bet from happening in the future. we can only hope. jpmorgan chase 's ceo, jamie dimon , was one of the voices against a strong version of the volcker rule, but, of course, congressman barney frank now sees this as a big opportunity.
>> mr. dimon wanted a version of the volcker rule that frankly wouldn't do very much. i think we now have a stronger argument for a volcker rule that says no to a bank. your main job is lending and managing the money of your clients. you should not put your own money at risk.
>> the jpmorgan mess is also reminding voters how wall street nearly sent us into a depression four years ago and it gives president obama no doubt an opportunity to do something about it in this election year. but a recent poll should make the president take notice. in five potential swing states , large majorities agree with the statement " president obama has not done enough to hold the banks accountable for their role in the housing collapse." the collapse of the housing market and wall street 's meltdown four years ago is still very much in the forefront of people's minds in this country. president obama should be out there, front on this issue, no doubt. especially since mitt romney still doesn't get it. here's what romney said today about jpmorgan.
>> i would not rush to pass new legislation or new regulation. this is, in the normal course of business , a large loss, but certainly not one which is crippling or threatening to the institution.
>> that is total denial. joining me tonight, vermont senator, bernie sanders . good to have you with us. the circumstances surrounding jpmorgan, how big an opportunity is this right now?
>> i think it calls attention to the recklessness and the greed of wall street . it reminds people that four years ago, these people on wall street forced this country into worst recession since the 1930s . forced us to have to bail them out. and while dodd/frank was a step further, it did not go far enough. the american people are angry with wall street . you know what? they want our financial institutions to invest in the real economy . they want wall street to be lending money to businesses, so we can create jobs. they do not want wall street involved in a gambling casino, waging risky bets, and losing substantial sums of money and threatening the entire economy.
>> how hard is it going to be for the senate to do what the american people want them to do when wall street is so terribly influential and some say the banks own the senate.
>> ed, let me tell you what many others might not tell you. some people think, well, gee, the congress regulates wall street . i think the truth is that wall street regulates the congress. they have untold, unlimited amounts of money, money which is used to get the deregulation, you recall during the '90s, in a bipartisan way, to get the deregulation which drove us into the brink of financial collapse. they have all kinds of lobbyists on wall street . they make all kinds of campaign contributions , so it will be hard. but on the other hand, as your polls show, the american people understand how dangerous wall street can be. they want congress to stand up and if we do what the american people want, it will be the right thing.
>> what do you want to do? you want to break up the banks ?
>> here's what i want to do. for a start, you need to re-regulate. bring back glass-steagall, say that we're providing federal insurance for large banks . you know why? you can't go gambling. invest in the economy.
>> commercial and investment banks have to be designated.
>> in investment banks want to invest, get involved in las vegas -type activity, let them do it, but not with insurance.
>> and how big a chance is that becoming a reality?
>> i think our friend jamie dimon may have made it easier. so invest, whatever you want to do, but don't come crawling from the federal government for insurance. that's the key issue here.
>> well, you have the big getting bigger after what happened on wall street .
>> i want the american people to hear this. today you have three out of the four largest banks bigger than we were before we bailed them out.
>> three of the four?
>> bigger than we were?
>> yes. significantly, also, you have the six largest financial institutions have assets of over $9 trillion, which is the equivalent of two-thirds of the assets, equivalent to two-thirds of the assets of gdp of the united states of america. so stop for a minute. when you have institutions that large, jpmorgan chase , over $2 trillion, while some will say, we're never going to bail them out again, we're going to let them fail, i don't think that's the case. if they go under, with they will be bailed out again. number two, if teddy roosevelt was alive right now and saw that the top six banks provided half the mortgages in america and two-thirds of the credit cards , what do you think a good republican like teddy roosevelt would have said?
>> we would have gone after it.
>> he would have said, break them up.
>> 69% of the american people own homes. doesn't common sense come to play with lawmakers, why would you want to gamble with that part of the economy? why would you give people the license to do that? now, they could go back tonight and do it again. byron dorgan was here last night, and he says they're all doing it.
>> when's the senate going to wake up? you're there. where's the other 99?
>> let me just say again what many people will not be happy to hear. wall street is extraordinarily powerful. congress doesn't regulate them. the big banks regulate what congress does.
>> is it a political winner for the president to just hammer this on the campaign trail?
>> ed, in my humble opinion, if when the president first took office -- and i've got to tell you, byron dorgan and i and others went to the white house , a half a dozen of us, we went and said, mr. president, you've got to stand up to wall street . you tell me, ed, how many of these guys have gone to jail?
>> well, none of them have gone to jail.
>> what kind of punishment has been rendered for the horrendous damage they have done to millions and millions people? nothing at all. vf virtually nothing at all. they're coming back stronger than ever. there's another issue i want to touch on. that is you have a situation where the fed, of course is supposed to be regulating the large financial institutions , and then you have the absurdity of having somebody like jamie dimon , a member of the new york fed.
>> you're going to introduce legislation --
>> we'll have legislation next week ending this absurd conflict of interest.
>> senator, good to have you with us. thanks so much.
>>> house speaker john boehner says he hasn't threatened default again, but it sure sounds like it. howard fineman joins me. and wisconsin democrats are getting swamped by scott walker lies on the tube. tonight i have a message to the democrats in this town. you won't want to miss it.