The Hill News

Is it any wonder why banks like JP Morgan can take such great risks?  We have set a precedent whereby our major banks operate with an implicit guarantee that the government will be standing by to bail them out. JP Morgan’s multibillion dollar debacle is just the latest example of why we must better regulate Wall Street, and break up entities that are deemed too big to fail. Taxpayers may not have needed to bail JP Morgan out this time, but a recent history lesson should remind us why banks that are too big to fail are too big to exist.
 
In October 2008, some big Wall Street firms that had made bad investments in the imploding mortgage market decided that taxpayers should cover their losses. Wall Street flooded into Congress and demanded that taxpayers bail them out by using tax money to buy $700 billion worth of their bad mortgages. Wall Street called them “toxic assets” and called their bailout plan TARP, the Toxic Asset Recovery Program. The plan was! for the taxpayers to buy their near-worthless toxic assets, so Wall Street could recover their investments. Our cash, for their trash.

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