Rep. Bernie Sanders’ (I-VT)House floor speech castigating upcoming request for additional bailout funds in S & L crisis. Feb 21, 1991…(read more)

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In the aftermath of the Savings and Loan Crisis, Bernie Sanders, then a member of the House of Representatives, was a vocal opponent of the government’s bailouts of the failing banks. The crisis, which began in the 1980s and lasted into the early 1990s, saw nearly 1,000 savings and loan associations (S&Ls) fail, costing taxpayers billions of dollars.

Sanders was critical of the government’s approach to addressing the crisis, which involved bailing out the failing S&Ls with taxpayer funds. In his view, the bailouts amounted to a “socialist” solution that rewarded the “greedy and reckless” behavior of the banks and their executives.

In a speech on the House floor in February of 1991, Sanders lambasted the government’s actions and called for a different approach. “At a time when we have a $4 trillion national debt, when we have a $500 billion deficit, it is absurd to be bailing out failed S&Ls with taxpayer funds, without getting anything in return,” he said. “The American people must not be forced to bear the burden of the stupidity, the greed, and the irresponsibility of the S&L managers and the regulators.”

Sanders proposed an alternative solution to the crisis, which involved “nationalizing” the failing banks and using government funds to invest in public infrastructure projects. He argued that this approach would not only address the immediate crisis but also create jobs and stimulate economic growth.

While Sanders’ proposal was not adopted, his criticisms of the government’s bailouts proved prescient. The S&L Crisis ultimately cost taxpayers over $124 billion, making it one of the most expensive financial disasters in American history.

Today, Sanders continues to advocate for a more progressive financial system that prioritizes the needs of working people over the interests of Wall Street. He has called for breaking up the big banks, imposing a tax on financial transactions, and strengthening consumer protections to prevent another financial crisis from occurring. And while he may not have succeeded in his efforts to address the S&L Crisis, his criticisms of the government’s response remain a cautionary tale for policymakers today.