Business

Could Bernie Sanders’ Suggestion Cause a Run on The Banks?

Sen. Bernie Sanders (I-Vt.), a self-proclaimed democratic socialist, has been working overtime ever since the Occupy Wall Street protests began. He made headlines two weeks ago when he grilled Fed Chairman Bernie Sanders over the “wealth gap” in America:

Since that contentious tête-à-tête, Sanders has ratcheted up his rhetoric, at one point labeling the financial industry as “the most powerful, dangerous and secretive” institution in the United States, reports The Hill. And his twitter account has been working around the clock.

Among the incendiary tweets sent out by his staff this weekend are ones that, of course, bemoan the “wealth gap” in America:

Sen. Bernie Sanders Suggestion May Cause a Run on The BanksBut then the Sanders staff went on to make a dangerous suggestion: customers should simply take their money out of the major banks and put it in smaller ones:

Sen. Bernie Sanders Suggestion May Cause a Run on The BanksThis echoes sentiments spoken earlier by Dick Durbin (D-IL) when he suggested that customers unhappy with Bank of America’s $5 debit fee should “vote with their feet:”

Other messages available on Sanders’s social networking page offer ideas that he says would “change the system to work for all Americans, not just the top one-percent,” including a Wall Street speculation fee and a cap on credit card interest rates, reports The Hill.

And it does not look like his criticisms for the financial industry are going to slow down anytime soon.

“I think the protesters deserve a whole lot of credit in focusing attention on Wall Street, which in my view, is the most powerful, dangerous, secretive major institution in the United States of America. And the more we learn about Wall Street, the more we learn about their reckless and illegal behavior, the better off we will be,” Sanders told the Vermont Reformer on Monday.

Sen. Bernie Sanders Suggestion May Cause a Run on The Banks

Self-proclaimed democratic socialist Sen. Bernie Sanders (I-VT)

“There is a lot to be said about people coming together at the grassroots level at this time. A lot of people are hurting, we are in the worst recession since the 1930s and this was caused by the greed and recklessness of Wall Street. And what the protesters are doing every day is reminding us of that reality,” the The Hill reports Sanders of having said.

It’s important to realize that behind all of this fiery rhetoric stands a U.S. Senator who is encouraging behavior that–if acted upon–could cause a run on some of the nation’s biggest banks. Runs, of course, can destabilize banks to the point where it has to file for bankruptcy. Several major banks filling for Chapter 11 would almost certainly cause a much bigger nationwide panic.

Is that really an appropriate solution to the “wealth gap?”

Comments (49)

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  • Ookspay
    Posted on October 17, 2011 at 10:13pm

    Even a broken clock is right twice a day. I would take Bernie’s advice but for a different reason. We are just a few bits of bad news before there is a run on the banks. We came very close in the fall of 08.

    Guns
    Ammo
    Gold, Silver
    Food
    Water (purifying pump)
    Batteries
    Form a small militia of friends and family & plan

    Report Post » Ookspay  
    • carnifex
      Posted on October 17, 2011 at 11:00pm

      Wow! Who’da thunk Socialist Sanders would espouse the principles of Adam Smith? The Weather Channel announced Hell just froze over. Maybe there is something to Man/Bear/Pig after all!

      Report Post » carnifex  
    • bmwrider
      Posted on October 17, 2011 at 11:44pm

      Remember Glenn’s 2010 prediction of “hyperinflation in 2011”? Where are the 60 dollar hershey bars? Maybe it isn’t such a good idea to listen to Glenn.

      Report Post » bmwrider  
  • Ookspay
    Posted on October 17, 2011 at 10:05pm

    Banks are forced to borrow billions from the Fed at zero percent interest. The banks then Loan it back to the US treasury for 3% interest., and the beat goes on…

    Report Post » Ookspay  
  • Jas0n
    Posted on October 17, 2011 at 9:23pm

    Nobody with any money listens to that idiot.

    Report Post »  
  • jaylew
    Posted on October 17, 2011 at 9:19pm

    I was born in Burlington Vermont in 1954…and even though my family moved to Texas in 1963….I usually told people I was from Vermont. But now a days I deny having anything to do with the state of Vermont. It has become a literal laughing stock of a state. The state car is a Subaru Outback…..and the populace now is mostly comprised of people born somewhere other than Vermont. Vermonters keep re-electing the ilk of Sanders and Leahy….and pretty soon…..no matter how lovely the leaves are each October…..there will be no one that interested in coming to Vermont for a visit then. Vermont sucks hard right now…and I am ashamed of admitting I was born there.

    Report Post » jaylew  
  • Mr.ManZ
    Posted on October 17, 2011 at 7:13pm

    Bernie Sanders was not the first to push this notion, It was Arianna Huffington of the Huffington Post. She some time back has instructed her followers to do this very thing.

    Report Post » Mr.ManZ  
    • 762x51
      Posted on October 17, 2011 at 8:22pm

      Yes, but HuffPuff is not a sitting United States Senator. This at best treason.

      Report Post »  
  • Bernard
    Posted on October 17, 2011 at 6:52pm

    When the banks of America prosper, America prospers. When the banks of America fall, America falls.

    Report Post »  
    • jzs
      Posted on October 17, 2011 at 7:03pm

      “It’s important to realize that behind all of this fiery rhetoric stands a U.S. Senator who is encouraging behavior that–if acted upon–could cause a run on some of the nation’s biggest banks. Runs, of course, can destabilize banks to the point where it has to file for bankruptcy. Several major banks filling for Chapter 11 would almost certainly cause a much bigger nationwide panic.”

      Okay, I’m confused. I thought the TP was against the bank bailout. You wanted them to fail if their practices lead them to insolvency. Now you’re worried about them failing? And let me get this straight, you object to an individual, whose is getting taken to the cleaners by rising fees, from moving his money to a smaller bank? Seriously? So much for capitalism!

      But it is okay to take money out of the bank to buy gold?

      Report Post » jzs  
    • TomFerrari
      Posted on October 17, 2011 at 9:30pm

      @jzs – you don’t even TRY to use logic anymore.
      Your comments do not deserve response. But, I will reply on the off chance some gullible person comes along and reads your dribble.
      The TEA Party was against BAILOUTS – we were not FOR FAILURE. Nobody wants a bank to fail. However, we firmly believe in the FREE MARKET SYSTEM, that allows GOOD BANKS to prosper and bad banks to fail. When you artificially protect businesses from failing, you remove the incentive to operate a business with sound economic principles and ethical business policies. When you KNOW you won’t be punished, and that Uncle Sam will bail you out, then, the impetus is to take as much risk as possible! Make dangerous gambles with investors’ money. After all, you will never have to answer for it.
      On the other hand, obama and his socialist democrats BAILED OUT THE BANKS, and now turn around and point the finger at them as big evil cabals! If they were so evil, why did you bail them out?
      You have an epic logic #FAIL .

      Report Post » TomFerrari  
    • jzs
      Posted on October 17, 2011 at 11:00pm

      TOM, I’m having trouble following your flawless logic. Many banks DID fail. Their banking practices led them to insolvency and toward bankruptcy. The Tea Party was against the bailout, without which those banks would have filed for bankruptcy. Where is my logic wrong on that? Those banks would gone under and the money anyone had in those banks would be gone. And who would have been left without the money deposited in those banks besides you and me? Where, my friend, is my logic wrong? That is what you wanted, or say you do now.

      And now you say that people shouldn’t withdraw their money from huge bank, a bank that is hiking up your fees and put them in a smaller bank because they’ll keep more of their own money that way. Is that what your saying? That we should support big banks even thought we can keep more of our money from smaller banks? So that the big banks, which you did not want to support when they became insolvent from risky business practices won’t fail? You’d have let them fail before, but now you your speaking against people moving their money to another bank where they don’t have these new fees? Are you against the free market? Are you against capitalism?

      Report Post » jzs  
    • Abysmal
      Posted on October 19, 2011 at 3:38pm

      Your logic failed when you stated that the deposits in failed banks “would be gone” and people would be “left without money.” Those deposits are FDIC-insured, and I speak from direct experience that such deposits do not evaporate upon a banks failure. Instead, the leftover assets of a failed bank are sold to a healthy bank and the FDIC makes up the difference up to insured limits.

      Your second paragraph is a series of questions that illustrate your failure to properly comprehend Tom’s argument. Tom’s post was specifically related to economic evolution and moral hazard. All of your questions center around a perceived inconsistency of support for big banks, which was never alluded to or implied in Tom’s argument. However, if you had followed the argument logically, you would realize the answer to every single question you raised in your second paragraph is a wholehearted, “NO!”

      Report Post » Abysmal  
  • SeanW
    Posted on October 17, 2011 at 6:47pm

    Glenn, you and your “interns” are doing an even worse job than before lol. Just so you know: Anonymous is spearheading a run on the major banks, encouraging everyone between now and November 5, 2011 to withdraw all of their funds and deposit it into a local credit union (and they provide the links to do so lol) then to follow your big bank’s procedures for closing your account.

    They also encourage everyone to do this if not before, preferably on Novermber 5, 2011 to “give the banks a Fifth of November that will never be forgot”

    Report Post »  
    • 762x51
      Posted on October 17, 2011 at 8:25pm

      I assume the W stands for Worm. I withdrew all of my money but could not afford gold so I invested in lead. I’ll see you and your Marxist horde on the battlefield – soon sonny boy.

      Report Post »  
  • tksocal
    Posted on October 17, 2011 at 6:39pm

    Occupy this & occupy that… Big bank this & big bank that… it‘s all just a diversionary tactic to take attention off of our current president’s failed policies.

    Report Post »  
  • Buddyc
    Posted on October 17, 2011 at 6:02pm

    The more Bernie Sanders’ comments are reported the better for conservatives. He is nuts. Of course it could cause a run on the banks just like his fellow idiot ChuckyouSchumer’s letter did to the California bank he put out of busienss.

    Report Post » Buddyc  
  • geonj
    Posted on October 17, 2011 at 5:30pm

    this is all cr@p. ignore this wall street, banking rhetoric, and focus on the lame man we have running this country. force change that encourages business to grow. let the rich get richer. when corporate America thrives, middle class America thrives. anyone out there who doesn’t agree is a smelly “occupier”

    Report Post » geonj  
  • I.Gaspar
    Posted on October 17, 2011 at 5:23pm

    They are trying to destroy this country.
    And he looks like he has an “out”…he can get in his Delorean and go back to the future.

    Report Post »  
  • Ducky657
    Posted on October 17, 2011 at 5:20pm

    Why does anyone pay attention to this boob? His own party ignores him and considers him a one man train wreck. There is one thing I can say about him that is positive–like Dennis Kucinich he has never tried to portray himself as anything but a socialist–period!

    Report Post »  
  • mad_hatter
    Posted on October 17, 2011 at 5:11pm

    You have to see how the comedian Crowder goes after the Hippies at OWS: http://www.americanparchment.com/video/2011/oct/crowder_occupied.html

    Report Post »  
  • Owt_Raged
    Posted on October 17, 2011 at 5:11pm

    I moved my money out of B of A as soon as the government said they were going to sue them.
    When the government goes after the credit unions, I guess I will resort to my safe and pay cash.
    I will not pay someone to use my own money when they are making money off of it by loaning it to others.

    Report Post » Owt_Raged  
  • @leftfighter
    Posted on October 17, 2011 at 4:57pm

    Well folks, I loathe his politics, but Bernie’s got a point. The incidental fees charged by banks is exactly why I’m in a credit union.

    That said, let’s not forget why B of A is charging the fee. Dems passed a bill that changed the margin that the banks could charge merchants per-transaction for accepting the card. Anyone who understands how the system works (or those with two working brain cells) understood that if they took that away, the banks would have to shift the fee from merchant to customer. Several people predicted exactly this would happen and fought passage of the bill with this exact argument. Dems dismissed it when the Right correctly called this what it was: a tax on everyone with a bank account.

    This is just how Progressives work…
    1. An outcry causes Dems to pass a “solution” to a problem (usually creating a bigger problem than the one it fixed).
    2. The common sense fallout to the “solution” elicits an outcry from the People.
    3. The fallout and outcry allows them to demonize the target of the original bill (in this case, the banks) even more so, allowing them to pass another “solution” which crack down even harder.
    4. Rinse and repeat.

    Plain and simple. Yet another example of how Progressives are the root of every problem facing the nation today.

    Report Post » @leftfighter  
    • reform
      Posted on October 18, 2011 at 5:41am

      Thanks left fighter when for so long we were accustomed to using cash then up pops debit cards. Now the places that you did business with didn’t have a problem with accepting your debit card, for they were the ones paying the fee to the bank to obtain your business and now Congress writes the Dodd bill and we are to get mad at the bank’s. Now the question is where did the Federal Reserve get the money to lend to the large banks? they made it out of thin air which in turn lend to the large banks which then lend to smaller banks. The question is who made the laws for all these banks to operate by? the same goes for the kids that are on the streets of New York should be in front of their universities questioning why their teachers are paid such a high wage to have a PhD which in turn has raised their fees to attend college. You have to wonder why the government took over the student loans and took it out of the hands of the banks. Student loans are one of the few loans that can never be forgiven they must be repaid however that is to be.

      Report Post »  
  • Robert999
    Posted on October 17, 2011 at 4:56pm

    Do you people realize that credit unions are Socialism In Action? These are businesses Owned by the Users instead of Private Investors. That is pure Socialism and should be Illegal in a capitalist country like America.

    Report Post »  
    • an old veteran
      Posted on October 17, 2011 at 5:42pm

      The share holders of any corporation are the ‘owners’ aren’t they? So a credit union is just another corporation right? Both receive the benefits of ownership.

      Report Post »  
    • reform
      Posted on October 18, 2011 at 5:48am

      Robert I thought if you belong to a credit union you are an investor in that credit union in other words you had a belong to it. So therefore I believe they operated with your capital to fund loans at a lower rate than a bank I could be wrong but back in the day I don’t recall private investors investing in credit unions. If they did change the rules then it happened through Congress to allow private investors to get into the credit unions, I belong to one back in the 70s and always got a better rate for car loan than a bank as well as a mortgage. If you were not a member you didn’t get said loan.

      Report Post »  
  • Shotgun167
    Posted on October 17, 2011 at 4:53pm

    If you still have a personal banking account at one of the mega-banks, you’re probably not paying attention. They don’t care about you except as far as they can strip as much money from you as they legally can. Join a credit union, or put your money in a small bank that has a president that lives in and supports your community.

    This isn’t about causing a run on a bank. This is about being smart with your money. Keeping a sub $1000 account at BoA is just asking to be raped with fees.

    Report Post »  
  • jb.kibs
    Posted on October 17, 2011 at 4:52pm

    Seriously, why don’t you give small businesses the lower interest rate loans? that’s not our job…
    gee, it sounds an awful lot like Thomas Jeffersons warning…
    “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. “

    Report Post »  
  • righthanddrive
    Posted on October 17, 2011 at 4:44pm

    Does anybody have info on who owns/controls these community banks? Let’s just stay with NY, VT and IL. I suspect that these banks are owned/controlled by local politicians or people who are big contributors to local politicians. I bet credit unions are controlled by unions.

    Report Post »  
  • Plan B
    Posted on October 17, 2011 at 4:40pm

    I moved my personal and business banking from Chase to a community bank when they tried to charge teller fees. I have not looked back. Chase actually charged a teller fee when you made a deposit. I do not advocate boycotts, etc. but as consumers, we have the right to choose who we do business with.

    Report Post »  
  • righthanddrive
    Posted on October 17, 2011 at 4:39pm

    A few years ago Sen. Schumer (D-NY) asked deposit holders to pull their money out of IndyMacy. Recently Sen. Durbin said the same thing and now this socialist from VT. Why are these three still living free when they have definitely sought to harm the country by destroying the banking system?

    Report Post »  
  • bharris0
    Posted on October 17, 2011 at 4:35pm

    Those that are protesting will likely suffer the most if our economy collapses. I seriously doubt that they have prepared for the worst case or even considered just how bad things can get, and I suspect they will be too stupid to survive.

    Report Post »  
  • jakartaman
    Posted on October 17, 2011 at 4:34pm

    I am no fan of wall st. or big banks. That said it was not twall st. or the banks that caused our economic ills.
    Lets not forget fudge packing Barnie Frank and the Connecticut crook Dobbs started this thing by forcing the banks to give loans to people who could not pay the loans back.
    Capitalism is not our problem its a government of socialists trying to re-distribute our wealth to the 40% democrats that don’t pay any taxs and take from those of us that do

    Report Post »  
  • lukerw
    Posted on October 17, 2011 at 4:28pm

    The Wealth is more unequal than any other Country… because America has the most of it. Go eat insects in Kenya… Bernie!

    Report Post » lukerw  
    • Snowleopard {gallery of cat folks}
      Posted on October 17, 2011 at 4:32pm

      Mr Sander’s is seeking to cause another panic, another run on the banks, and the need for them to turn to the Fed’s to meet the demands for funds which of course will come with some massive sets of attachments…all for the gain of the Fed’s and the Obama admins control and power.

      Report Post » Snowleopard {gallery of cat folks}  
  • scguitar
    Posted on October 17, 2011 at 4:20pm

    In the opinion section of my College’s newspaper, some dolt was advocating the same thing saying that the bank owners were “scared” and the WallStreet protesters should send them a message. Liberalism…. I mean lunacy, at its finest

    Report Post »  
    • IronSights
      Posted on October 17, 2011 at 4:57pm

      I suspect that mommy and daddy would have to turn over the trust fund in order for them to move “their” money anywhere. Sure they may have $55.00 in their checking account, but any “money” they perceive they have to move probably isn’t theirs until the kid graduates college.

      Report Post » IronSights  
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