Liberal congressman Sherrod Brown and conservative congressman David Vitter are pushing to break up the big banks:



~~~



Huffington Post reports:

Sen. Sherrod Brown (D-Ohio), along with unlikely ally Sen. David Vitter (R-La.), is launching an effort to break up the taxpayer-funded party on Wall Street.

“The best example is that 18 years ago, the largest six banks’ combined assets were 16 percent of GDP. Today they’re 64-65 percent of GDP,” Brown said. “So the large banks are getting bigger and bigger, partly because of the financial crisis, partly because of the advantages they have.” [Indeed, they’re 30% bigger than they were when the big “financial” reform bill was passed.]

***

“The system is such that the big banks have far too many advantages, bestowed in part by the marketplace, because investors understand and the market understands that government might in fact bail them out, so there is lower risk for investors, and that means that they can borrow money at a lower cost than anybody else can,” Brown said, explaining why small- and mid-sized banks are at a disadvantage.

Brown and Vitter announced on Thursday that they were working together on bipartisan legislation to address this problem.

“I think the fact that Sen. Brown and I are both here on the floor echoing each other’s concerns, virtually repeating each other’s arguments, is pretty significant,” Vitter said Thursday in his Senate floor remarks. “I don’t know if we quite define the political spectrum of the United States Senate, but we come pretty darned close. And yet, we absolutely agree about this threat.”

In his floor remarks, Brown underscored the urgency — and the challenge — in breaking up the biggest banks.

“Just about the only people who will not benefit from reining in the megabanks are a few Wall Street executives,” he said.

***

Brown’s push received a conservative boost this month from pundit George Will, who wrote that the senator’s efforts deserve support from the right.

“By breaking up the biggest banks, conservatives will not be putting asunder what the free market has joined together,” he wrote. “Government nurtured these behemoths by weaving an improvident safety net and by practicing crony capitalism. Dismantling them would be a blow against government that has become too big not to fail.”

“When the Will column came out, it was pretty interesting,” said Brown. “People I’ve known over the years who have my email address — I got several emails from people who kind of surprised me that they supported the idea.”

Conservative Wall Street Journal columnist Peggy Noonan has urged Republicans to break up the big banks, as has former GOP presidential candidate Jon Huntsman. [So has James Pethokoukis, a columnist for the American Enterprise Institute, who writes in the pages of the Weekly Standard.]

***

In 2010, Brown and then-Sen. Ted Kaufman (D-Del.) also offered an amendment to break up the big banks.

***

“I’m not going to mention names, but some who voted [against the 2010 amendment] have come up and said they’re going to vote for it. And we just have a different Senate now from 2010,” he said, adding, “More and more senators have come to me and said they are looking at this differently now.”