Editorial: Right-sizing on Wall Street
Akron Beacon Journal – Sherrod Brown and Mitch McConnell agree: Both want to avoid taxpayer bailouts of big banks.
The difference between the two senators? Listen to McConnell, and he appears content let big banks fail, the country then coping with the immense wreckage. Brown has a more practical and promising approach.
The Ohioan joined his fellow Democrat, Ted Kaufman of Delaware, in unveiling the Safe Banking Act of 2010 last week. The measure calls for restricting the size of the country's largest banks. The bill would limit to 2 percent of the overall economy the amount a bank could borrow to finance its operations.
Financial firms that are not banks, the likes of AIG and GE Capital, would face a limit of 3 percent.
Brown and Kaufman have company. Simon Johnson, a professor at MIT and a former chief economist at the International Monetary Fund, has been thumping the tub for this idea, most fully in 13 Bankers, a recent book he has co-authored. The president of the Federal Reserve Bank of Dallas has voiced his support. Even Republicans have sounded sympathetic, noting the words last fall of Alan Greenspan, the former chairman of the Federal Reserve: ''If they're too big to fail, they're too big.''
