The Websternet

Former Secretary of Labor and cloying nudist Robert Reich has piped up in defense of Bernie Sanders, a transcript of whose interview with the NY Daily News seems to display some uncertainty regarding federal authority over large financial institutions.

But today the promise to go gangbusting on financial industries is a red herring raised ten years too late, and it’s improbable and dishonest coming from political candidates.

Dodd-Frank provides for federal liquidation and receivership of banks and other institutions even where the company’s board doesn’t want it to happen.

However, Sanders, Clinton and other pols who want to “break up the big banks” are ignoring the fact that these same institutions are the undisputed champions of complying with federal regulations.

That’s not easy to do, and it’s exactly how they got “too big” in the first place. Institutions grew so complex that they could profit from unethical practices that were NOT illegal, yet.

If certain companies made exactly the same mistakes today that they did ten years ago, yes, the FDIC would have the power to liquidate them now. It’s an appealing prospect to Americans who, rightly, feel cheated by the subprime lending scandal and bailouts that followed. And it’s not going to happen.