By Pam Martens and Russ Martens: January 6, 2016
Presidential candidate Senator Bernie Sanders of Vermont gave a speech yesterday that is destined to go down in the history books of this era, further enshrining him as one of the most courageous voices of our time. Sanders promised to break up the serially criminally-inclined banks on Wall Street and reinstate the Glass-Steagall Act to drive a permanent stake through the heart of too-big-to-fail. But if you watched either his official campaign’s YouTube video of his speech or the one provided by volunteers for his campaign, three key passages of what he said have gone missing from the video. We were able to reconstruct the full speech as delivered by transcribing the three missing sections from a YouTube video posted by the PBS Newshour which, notably, had no gaps in its video. (Watch the PBS video of the speech at the end of this article.)
Perhaps it’s simply attributable to a glitch. On the other hand, if you are familiar with the dirty tricks used by the American Liberty League to undermine proposed reforms by Franklin Delano Roosevelt in a similar era of unprecedented corruption and one percent control, or conversant with how the Kochtopus is attempting to rewrite The Big Short movie, you might well harbor suspicions of skulduggery.
The first missing chunk of video comes early in Sanders speech as he explains what a real banking system is supposed to do. The portion that appears in orange below is missing from the official video:
Sanders: “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 can create decent-paying jobs in our country. 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.”
What could possibly be so threatening in describing Wall Street as “an island unto itself, gambling trillions…” that someone would censor it from a speech? Well, Wall Street is located in Manhattan – an island. And while Manhattan is often referred to as the economic and cultural center of America, it’s also where the vast majority of financial crime is originating and which has, not coincidentally, “more billionaires than any other city in the world,” a total of 78 according to Forbes. Many of these billionaires have fleeced shareholders, or the banks’ depositors, or investors to achieve that one-percent status.
Sanders is not just anybody making these charges. He is currently one of the most popular members of Congress and is drawing tens of thousands of potential voters to rallies across America while competing head on with the Wall Street money spigot by raising campaign donations from average folks by tapping into the simmering anger against our rigged wealth transfer system run by Wall Street and backstopped by its crony regulator, the New York Fed – all physically located on the island of Manhattan.
The next section that went missing goes like this (the orange text was missing from the video):
Sanders: “In 2008, the taxpayers of this country bailed out Wall Street because we were told that they were ‘too big to fail.’ Yet, today, today, three out of the four largest financial institutions — JP Morgan Chase, Bank of America and Wells Fargo — are nearly 80 percent bigger than before we bailed them out because they were too-big-to-fail. Incredibly, the six largest banks in this country issue more than two-thirds of all credit cards and more than 35 percent of all mortgages. They control more than 95 percent of all financial derivatives and hold more than 40 percent of all bank deposits. Their assets today are equivalent to nearly 60 percent of the GDP of the United States of America. Enough is enough.
“If a bank is too-big-to-fail it is too big to exist. When it comes to Wall Street reform that must be our bottom line. This is true not just from a risk perspective and the fear of another bailout. It is also true from the reality that a handful of huge financial institutions simply have too much economic and political power over this country.”
Take the first missing section and combine it with the second and you get the picture: this “handful of huge financial institutions” just happens to operate out of Manhattan and just happens to be minting Manhattan billionaires by the boatload and just happens to be placing these billionaires on the Board of their regulator, the New York Fed, and just happens to have thrown millions at Bill Clinton’s charity foundation and just happens to be donating millions to Hillary’s push for President of the United States, in whose administration they will just happen to get to pick the U.S. Treasury Secretary and Fed Chair, who will just happen to sit on the Financial Stability Oversight Council and make sure no harm comes to these mega Wall Street banks.
The final missing section went like this:
Sanders: “Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy. And together we will reinstate a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services. Let’s be clear: this legislation, introduced by my colleague Senator Elizabeth Warren, her legislation aims at the heart of the shadow banking system. In my view, Senator Warren is right. Dodd-Frank should have broken up Citigroup and other ‘too-big-to-fail’ banks into pieces. And that is exactly what we need to do. And that is what I commit to do as President of the United States.”
Invoking the name of Senator Elizabeth Warren, also wildly popular with Sanders’ supporters, pulls momentum from Hillary Clinton’s campaign. Warren has not yet endorsed a candidate. Also, most Americans do not know that legislation has actually been introduced in the Senate to reinstate the Glass-Steagall Act and that the wildly popular Warren and Sanders are both co-sponsors of that legislation. This presents a bond between the pair that was previously under the radar to many people.
It also confirms to the public that two people they trust on Wall Street issues – Sanders and Warren – believe this legislation is essential to leveling the playing field for the average American while Hillary Clinton, with her Wall Street flotilla of donors, says it is not.
The last missing section also invokes what Warren and Sanders think of Citigroup – one of those too-big-to-fail mega banks headquartered in Manhattan. As it just so happens, the name Citigroup has become almost an appendage to the Clinton name. No Wall Street firm has had a closer relationship with the Clintons than the serially charged Citigroup, which last May admitted to a criminal felony charge for rigging foreign exchange markets (along with four other mega banks). Citigroup was the moving force behind Bill Clinton signing the legislation in 1999 that repealed the Glass-Steagall Act. This allowed Citigroup to continue to own Citibank, an insured-depository bank, insurance companies, the investment bank Salomon Brothers, the brokerage firm, Smith Barney, all under one roof.
This combustible mixture, of course, blew up the bank in 2008 – the stock at one point traded at 99 cents – pre-crash shareholders have yet to regain the vast majority of their investment, while the New York Fed secretly funneled over $2 trillion cumulatively in below-market rate loans into its insolvent carcass to prop up the bank. That was on top of the government’s infusion of $45 billion in equity and over $300 billion in asset guarantees, making Citigroup the largest bank bailout in U.S. history — by a wide margin.
According to the Center for Responsive Politics, Citigroup was the largest donor to Hillary’s first run for the Senate. (The employees or PACs of the firm make the donations, not the corporation itself.)
Citigroup also kindly provided a $1.995 million mortgage to the Clintons, which allowed them to buy their Washington, D.C. residence prior to their leaving the White House at the end of Bill Clinton’s final term as President. Citigroup has also paid Bill Clinton hundreds of thousands of dollars in speaking fees and committed $5.5 million to the Clinton Global Initiative, a charity run by the Clinton family.
Below is the full transcript of Bernie Sanders’ speech, as delivered, rather than as written, on January 5, 2016. Below the transcript is the full video of the speech from the PBS Newshour.
Transcript of Senator Bernie Sanders’ speech on reforming Wall Street, as delivered, at Town Hall, 123 West 43rd Street, New York City on January 5, 2016, 2 p.m.
The American people are catching on. They understand that there is something profoundly wrong when, in our country today, the top one-tenth of 1 percent owns almost as much wealth as the bottom 90 percent. They understand that something is profoundly wrong when the 20 richest people in our country own more wealth than the bottom half of the American population — 150 million people. They know that the system is rigged when the average person is working longer hours for lower wages, and yet 58 percent of all new income generated is going to the top 1 percent.
Executives on Wall Street have extraordinary power over the economic and political life of our country. As most people know, in the 1990s and later, the financial interests spent billions of dollars on campaign contributions to force through Congress the deregulation of Wall Street, the repeal of the Glass-Steagall Act and the weakening of consumer protection laws all across our country.
Wall Street spent this money in order to get the government off their backs and to show the American people what they could do with this new-won freedom from regulation. Well, they sure showed the American people. In 2008, the greed, recklessness and illegal behavior on Wall Street nearly destroyed the American and global economy.
Millions of Americans lost their jobs, they lost their homes and they lost their life savings.
While Wall Street received the largest taxpayer bailout in the history of the world with no strings attached, the American middle class continues to disappear, poverty is increasing and the gap between the very rich and everyone else continues to grow wider. And Wall Street executives still receive huge compensation packages as if the financial crisis they created never happened.
Greed, fraud, dishonesty and arrogance, these are some of the words that best describe the reality of Wall Street today.
So, to those on Wall Street who may be listening to my remarks, and I’m sure there are many of them, let me be very clear. Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the very fabric of our nation. And, here is a New Year’s Resolution that I will keep if elected president. And that is, if Wall Street does not end its greed, we will end it for them.
We will no longer tolerate an economy and a political system that has been rigged by Wall Street to benefit the wealthiest Americans in this country at the expense of everyone else.
While President Obama deserves credit for improving this economy after the Wall Street crash, the reality is that a lot of unfinished business remains to be done.
Our goal must be to create a financial system and an economy that works for all of our people, not just a handful of billionaires. That means we have got to 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.”
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 can create decent-paying jobs in our country. 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.
In 2008, the taxpayers of this country bailed out Wall Street because we were told that they were “too big to fail.” Yet, today, today, three out of the four largest financial institutions — JP Morgan Chase, Bank of America and Wells Fargo — are nearly 80 percent bigger than before we bailed them out because they were too-big-to-fail. Incredibly, the six largest banks in this country issue more than two-thirds of all credit cards and more than 35 percent of all mortgages. They control more than 95 percent of all financial derivatives and hold more than 40 percent of all bank deposits. Their assets today are equivalent to nearly 60 percent of the GDP of the United States of America. Enough is enough.
If a bank is too big to fail it is too big to exist. When it comes to Wall Street reform that must be our bottom line. This is true not just from a risk perspective and the fear of another bailout. It is also true from the reality that a handful of huge financial institutions simply have too much economic and political power over this country.
If Teddy Roosevelt, the Republican trust-buster, were alive today, he would say “break them up.” And he would be right. That’s exactly what we have to do and here’s how I will accomplish that.
Within the first 100 days of my administration, I will require the Secretary of the Treasury Department to establish a “too-big-to-fail” list of commercial banks, shadow banks and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout.
Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy. And together we will reinstate a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services. Let’s be clear: this legislation, introduced by my colleague Senator Elizabeth Warren, her legislation aims at the heart of the shadow banking system. In my view, Senator Warren, is right. Dodd-Frank should have broken up Citigroup and other “too-big-to-fail” banks into pieces. And that is exactly what we need to do. And that is what I commit to do as president of the United States.
Now, my opponent, Secretary Clinton says that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits.
Secretary Clinton is wrong.
Shadow banks did gamble recklessly, but where did that money come from? It came from the federally-insured bank deposits of big commercial banks – something that would have been banned under the Glass-Steagall Act.
Let us not forget: President Franklin Roosevelt signed this bill into law precisely to prevent Wall Street speculators from causing another Great Depression. And, it worked for more than five decades until Wall Street watered it down under President Reagan and killed it under President Clinton.
And, let’s not kid ourselves. The Federal Reserve and the Treasury Department didn’t just bail out shadow banks. As a result of an amendment that I offered to audit the emergency lending activities of the Federal Reserve during the financial crisis, we learned that the Fed provided more than $16 trillion in short-term, low-interest loans to every major financial institution in this country including Citigroup, JPMorgan Chase, Bank of America, Wells Fargo, not to mention large corporations, foreign banks, and foreign central banks throughout the world.
Secretary Clinton says we just need to impose a few more fees and regulations on the financial industry. I disagree.
As former Secretary of Labor Robert Reich has said and I quote: “Giant Wall Street banks continue to threaten the well being of millions of Americans, but what to do? Bernie Sanders says break them up and resurrect the Glass-Steagall Act that once separated investment from commercial banking. Hillary Clinton says charge them a bit more and oversee them more carefully … Hillary Clinton’s proposals would only invite more dilution and finagle. The only way to contain the Street’s excess is with reforms so big, bold, and public they can’t be watered down – busting up the biggest banks and resurrecting Glass-Steagall.”
Secretary Reich is right. Real Wall Street reform means breaking up big banks and re-establishing firewalls that separates risk taking from traditional banking.
My opponent says that, as a senator, she told bankers to “cut it out” and end their destructive behavior. But, in my view, establishment politicians are the ones who need to “cut it out.” The reality is that Congress does not regulate Wall Street…(crowd interrupts and chants “Wall Street regulates Congress”.)
You got it! And you know what, as President we’re gonna end that reality.
It is no secret that millions of Americans have become disillusioned and alienated from our political process. They don’t vote. They don’t believe much of what comes out of Washington. They don’t think that there is anyone there representing their interests. In my view, one of the reasons for the deep disillusionment that is so widespread is the understanding that our criminal justice system is broken and grossly unfair. It is broken, unfair and we do not have equal justice under the law. The average American sees kids being arrested and sometimes even jailed for possessing marijuana or other minor crimes. But when it comes to Wall Street executives, some of the wealthiest and most powerful people in this country, whose illegal behavior caused pain and suffering for millions of Americans – somehow nothing happens to them.
Their illegal behavior destroys our economy, millions lose their jobs, their homes, their life savings, but for the CEOs of Wall Street, no police record, no jail time, no justice.
We live in a country today that has an economy that is rigged, a campaign finance system which is corrupt and a criminal justice system which, too often, does not dispense justice.
Not one major Wall Street executive has ever been prosecuted for causing the near collapse of our entire economy. That will change under my administration. “Equal Justice Under Law” will not just be words engraved on the entrance of the Supreme Court. It will be the standard that applies to Wall Street and all Americans.
It seems like almost every few weeks we read about one giant financial institution after another being fined or reaching settlements for their reckless, unfair and deceptive activities.
Some people believe that this is an aberration: that we have an honest financial system in which, every now and then, major financial institutions do something wrong and get caught. In my view, the evidence suggests that would be an incorrect analysis.
The reality is that fraud is the business model of Wall Street. It is not the exception to the rule. It is the rule. And in a very weak regulatory climate the likelihood is that Wall Street gets away with a lot more illegal behavior than we know of.
How many times have we heard the myth that what Wall Street did may have been wrong but it wasn’t illegal?
Let me help shatter that myth today.
Since 2009, major financial institutions in this country have been fined $204 billion. $204 billion. And that once again takes place in a weak regulatory climate.
Here are just a few examples, a few examples, of when major banks were caught doing illegal activity.
In August 2014, Bank of America settled a case with the Department of Justice for more than $16 billion on charges that the bank misled investors about the riskiness of mortgage-backed securities it sold in the run-up to the crisis.
In November of 2013, JP Morgan settled a case for $13 billion with the Department of Justice and the Federal Housing Finance Agency over charges that the bank knowingly sold securities made up of low-quality mortgages to Fannie Mae and Freddie Mac.
In June of 2014, BNP Paribas was sentenced to five years’ probation and was ordered to pay $8.9 billion in penalties by a U.S. District Judge in Manhattan after the bank pled guilty to charges of violating sanctions by conducting business in Sudan, Iran and Cuba.
Let me, in addition, read you a few headlines and you tell me how it could possibly make sense that not one executive on Wall Street was prosecuted for fraud.
CNN Headline, May 20, 2015: “Five big banks pay $5.4 billion for rigging currencies.” Those banks include JPMorgan Chase and Citigroup.
Headline from the International Business Times (February 24, 2015): “Big Banks Under Investigation For Allegedly Fixing Precious Metals Prices.” The Banks under investigation included Goldman Sachs and JPMorgan Chase.
Headline from The Real News Network (November 26, 2013): “Documents in JPMorgan settlement reveal how every large bank in the U.S. has committed mortgage fraud.”
Headline from The Washington Post (March 14, 2014): “In lawsuit, FDIC accuses 16 big banks of fraud, conspiracy.” Banks included Bank of America, Citigroup and JPMorgan Chase.
Headline from the Guardian (April 2, 2011): “How a big U.S. bank laundered billions from Mexico’s murderous drug gangs.” This article talks about how Wachovia (which was acquired by Wells Fargo) aided Mexican drug cartels in transferring billions of dollars in illegal drug money. And this is what the federal prosecutor said about this and he said and I quote: “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.”
Yet, the total fine for this offense was less than 2 percent of the bank’s $12 billion profit for 2009 and no one went to jail. No one went to jail.
And, if that’s not bad enough, here’s another one.
Headline: The Wall Street Journal, February 9, 2011: “J.P. Morgan Apologizes for Military Foreclosures.” Here is a case where JPMorgan Chase, the largest bank in America, wrecked the finances of 4,000 military families in violation of the Civil Service Members Relief Act, yet no one went to jail.
And, when I say that the business model of Wall Street is fraud that is not just Bernie Sanders talking. That is what financial executives themselves told the University of Notre Dame in a study on the ethics of the financial services industry last year.
According to this study, listen to this, 51 percent of Wall Street executives making more than $500,000 a year found it likely that their competitors have engaged in unethical or illegal activity in order to gain an edge in the market.
More than one-third of financial executives have either witnessed or have firsthand knowledge of wrongdoing in the workplace.
Nearly one in five financial service professionals believe they must engage in illegal or unethical activity to be successful.
Twenty-five percent of financial executives have signed or been asked to sign a confidentiality agreement that would prohibit reporting illegal or unethical activities to the authorities.
Here is what one banker from Barclays said in 2010, when he was caught trying to price-fix the $5 trillion-per-day currency market: “If you ain’t cheating, you ain’t trying.”
Here’s what an analyst from Standard & Poors said in 2008, and I quote: “Let’s hope we are all wealthy and retired by the time this house of cards falters.”
This country can no longer afford to tolerate the culture of fraud and corruption on Wall Street.
Under my administration, Wall Street CEOs will no longer receive a get-out-of jail free card. Not only will big banks not be too-big-to-fail, big bankers will not be too big to jail.
As president, I will nominate and appoint people with a track record of standing up to power, rather than those who have made millions defending Wall Street CEOs. Goldman Sachs and other Wall Street banks will not be represented in my administration.
And, if we are serious about reforming our financial system, we have got to establish a tax on Wall Street speculators. We have got to discourage reckless gambling on Wall Street and encourage productive investments in the job-creating economy.
We will use the revenue from this tax to make public colleges and universities tuition free. As all of you remember, during the financial crisis when Wall Street’s greed and illegal behavior nearly destroyed our economy, the middle class of this country bailed out Wall Street. Now, it’s Wall Street’s turn to help the middle class of this country.
We cannot have a safe and sound financial system if we cannot trust the credit agencies to accurately rate financial products. And, the only way we can restore that trust is to make sure credit rating agencies do not make a profit from Wall Street.
The truth is that investors would not have bought the risky mortgage backed derivatives that led to the Great Recession if credit agencies did not give these worthless financial products triple-A ratings – ratings they knew were bogus.
And, the reason these risky financial schemes were given such favorable ratings is simple. Wall Street paid for them.
Under my administration, we will turn for-profit credit rating agencies into non-profit institutions, independent from Wall Street. No longer will Wall Street be able to pick and choose which credit agency will rate their products.
If we are going to create a financial system in this country that works for all Americans, we have got to stop financial institutions from ripping off the American people by charging sky-high interest rates and outrageous fees.
In my view, it is unacceptable that Americans are paying $4 or $5 in fees every time they go to an ATM.
It is wrong that millions of Americans are paying credit card interest rates of 20 or 30 percent.
The Bible has a term for this practice. It’s called usury. And in “The Divine Comedy,” Dante reserved a special place in Hell for those who charged people usurious interest rates.
Well today, we don’t need the hellfire and the pitch forks, we don’t need the rivers of boiling blood, but we do need a national usury law.
In 1980, Congress passed legislation to require credit unions to cap interest rates on their loans at no more than 15 percent. And, that law has worked well. Unlike big banks, credit unions did not receive a huge bailout from the taxpayers of this country. It is time to extend this cap to every lender in America.
We must also cap ATM fees at $2.00. People should not have to pay a 10 percent fee for withdrawing $40 of their own money out of an ATM.
Huge banks need to stop acting like loan sharks and start acting like responsible lenders.
We also need to give low-income Americans affordable banking options.
The reality is – this is quite unbelievable but true – that millions of low-income Americans live in communities where there are no normal banking services. Today, if you live in a low-income community and you need to cash a check or get a loan to pay for a car repair or a medical emergency, where do you go?
You go to a payday lender who could charge an interest rate of over 300 percent and trap you into a vicious cycle of debt. That has got to end.
We need to stop payday lenders from ripping off some of the most vulnerable people in this country. Post offices exist in almost every community in our country. One important way to provide decent banking opportunities for low income communities is to allow the United States Postal Service to engage in basic banking services, and that’s what I will fight for.
Further, we need to structurally reform the Federal Reserve to make it a more democratic institution responsive to the needs of ordinary Americans, not just billionaires on Wall Street.
When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system. We need the Fed to act with that same boldness today, that fierce sense of urgency, to combat unemployment and low wages.
We need to structurally reform the Federal Reserve to make it a more democratic institution responsive to the needs of ordinary Americans, not just Wall Street.
It is unacceptable that the Federal Reserve has been hijacked by the very bankers it is in charge of regulating. The American people, I believe, would be shocked to know that Jamie Dimon, the CEO of JP Morgan Chase, served on the board of the New York Fed at the same time that his bank received a $391 billion bailout from the Federal Reserve. That is a clear conflict of interest that I will ban as president.
As President I will not allow the foxes to be guarding the henhouse at the Fed. Under my administration, banking industry executives will no longer be able to serve on the Fed’s boards and handpick its members and staff.
Further, the Fed should stop paying financial institutions interest to keep money out of the economy and parked at the Fed. Incredibly, the excess reserves of financial institutions that are sitting in the Federal Reserve have grown from less than $2 billion in 2008 to $2.4 trillion today. That is absurd.
Instead of paying interest on these reserves, the Fed should charge them a fee that could be used to create jobs all over America.
Let me tell you something that no other candidate will tell you. No president, not Bernie Sanders or anyone else, can effectively address the economic crises facing the working families of this country alone. No president can do it alone. The truth is – and it’s important that every American understand this – the truth is that Wall Street, corporate America, the corporate media and wealthy campaign donors are just too powerful.
What this campaign is about is building a political movement which revitalizes American democracy, which brings millions of people together – black and white, Latino, Asian-American, Native American – young and old, men and women, gay and straight, native born and immigrant, people of all religions.
Yes, Wall Street does have enormous economic and political power. Yes, Wall Street makes huge campaign contributions, they have thousands of lobbyists and they provide very generous speaking fees to those who go before them.
Yes, Wall Street has an endless supply of money. But we have something they don’t have. And that is that when millions of working families stand together, demanding fundamental changes in our financial system, we have the power to bring about that change.
Yes, we can make our economy work for all Americans, not just a handful of wealthy speculators. And, now more than ever, that is exactly what we must do.
And so my message to you today is simple and straightforward: If elected president, I will rein in Wall Street so they cannot crash our economy again.
Will the folks on Wall Street like me? No. Will they begin to play by the rules if I am president? You better believe it!
Thank you all for being here and I look forward to working with the most powerful force in our great nation, not the Barons of Wall Street but the people of our government who are going to fight to create a government that works for us all and not just the one percent. Thank you all very much.