Vermont Senator Bernie Sanders just dropped his name in the hat for another presidential run–this time, in 2020 as the 77-year-old candidate will likely take aim at Wall Street once again as part of his campaign.
Sanders enters a diverse Democratic field that includes the likes of Elizabeth Warren, Kirsten Gillibrand, Kamala Harris, Cory Booker and Amy Klobuchar. Nonetheless, Sanders is brimming with confidence as he makes another run at the Oval Office following a 2016 campaign.
“We’re gonna win,” Sanders confidently told “CBS This Morning” co-host John Dickerson.
Sanders made a name for himself in 2016 for his progressive ideas and those involving Wall Street banks will more than likely be on his agenda once more as the financial crisis in 2008 still resonates with his base. As such, here are three things to expect from Sanders’ second try at president.
1. Bringing Back the Glass-Steagall Act
The financial crisis in 2008 was fueled by an extreme risk-on mode that saw banks heavily speculating on risky assets like mortgage-backed securities (MBS). Of course, many of the these MBS products included subprime loans made via lax lending restrictions to often less-than-qualified homeowners.
When the real estate market went belly up, as did these MBS products and eventually Wall Street giants like Lehman Brothers.
“We need a banking system that is part of the productive economy – making loans at affordable rates to small- and medium-sized businesses so that we create decent-paying jobs,” Sanders said in his 2016 campaign when speaking on Wall Street and the economy. “Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments, making huge profits and assured that, if their schemes fail, the taxpayers will be there to bail them out.”
Additionally, the Great Recession of 2008 roiled investors with deep declines that they were not anticipating as a result of overexposure to stocks with exorbitant prices relative to their value. As such, Sanders will probably continue to push for bringing back the Glass-Steagall Act, which separates investment/speculation activities with those of commercial banking services.
“And, I will fight to reinstate a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services,” Sanders said during the 2016 speech.
2. Limiting the Size of Banks
Sanders is an ardent opponent of the “too big to fail” mantra that circulated Wall Street prior to the financial collapse 10 years ago. This time around, things will likely be no different.
Last year, Sanders took aim at large financial companies like J.P. Morgan Chase, Goldman Sachs and Warren Buffett’s holdings company Berkshire Hathaway, arguing that size equates to too much risk. Sanders introduced a bill that would break up any financial institution with a total exposure of more than 3 percent of gross domestic product.
“No financial institution should be so large that its failure would cause catastrophic risk to millions of Americans or to our nation’s economic well being,” Sanders said in a statement. “We must end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street: the policy of ‘too big to fail.'”
3. Restricting Corporate Share Buybacks
In conjunction with Senate Democratic leader Charles Schumer of New York, Sanders recently proposed legislation that would effectively place preconditions on a company’s ability to repurchase shares of its own stock.
“Our legislation would set minimum requirements for corporate investment in workers and the long-term strength of the company as a precondition for a corporation entering into a share buyback plan. The goal is to curtail the overreliance on buybacks while also incentivizing the productive investment of corporate capital,” Schumer and Sanders wrote.
According to an article in CNBC, “more than $1 trillion in buybacks were announced by large companies after a corporate tax cut pushed through Washington in late 2017 left companies with a lot of extra cash to spend. But instead of significantly raising worker pay or investing in equipment, companies mostly used the cash to buy their stock. And some large companies are buying back billions of dollars of shares while announcing layoffs and factory and store closings, the senators wrote.”
The legislation came about as companies like Walmart and Harley Davidson have caught heat for laying off hundreds of workers in order to free up capital to repurchase their own stock.
“At a time of huge income and wealth inequality, Americans should be outraged that these profitable corporations are laying off workers while spending billions of dollars to boost their stock’s value to further enrich the wealthy few,” the senators said.
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