Thor Benson writes:  When you enter the ballot booth this November, keep in mind that you could very well be voting for the captain of sinking ship. You may be voting for the next president who will have to steer us through a financial meltdown, and it’s all because we never truly learned from our mistakes.

Note: Lloyd Blankenfein of Goldman Sachs has financed and provided clients to Clinton’s son-in-law.

The financial crisis of 2008 happened because the banks were too big, they were too opaque and they were engaging in risky business practices. Where are we now? Many of the banks are much bigger, they’re still opaque and they’re still engaging in risky business practices. This is a recipe for (another) disaster..

“We don’t actually know a lot of what goes on in banking,” Anat Admati, a professor of finance and economics at Stanford University, told Salon. “We don’t have good monitoring of it.”

Admati said a lot of what banks do is deeply buried in vast financial records, so it’s extremely difficult to follow what industries banks are involved in and what they’re doing. She said the banks benefit from this opaqueness, because it means they can get away with risky business practices while no one knows what’s going on.

The banks are also very interconnected, in various ways. Through contracts and their investments, these enormous and volatile corporations are closely working together and exposing themselves to danger together, which means when one big bank falls, they all start to tumble.

One of the major risks banks take is not having enough equity to be considered stable. If there is a financial crisis, a bank with a lot of equity has a buffer that can help prevent it from failing, but many banks currently operate with less than 10 percent equity. “The numbers are pathetic,” Admati said. She said they’ve improved slightly since the financial crash, but their equity numbers are still dangerously low.

Through various mergers and expansions, these banks have become so large that it’s hard to fathom how large they truly are. “All student debt in this country, which is considered a huge problem, is approximately $1.3 trillion,” Admati said. “That is a fraction of JPMorgan Chase. That is like half of the accounting numbers of JP Morgan Chase.” She said these banks have their hands in nearly every part of the economy, and they’re not going to get smaller any time soon unless something is done.
Richard Wolff, a professor of economics emeritus at the University of Massachusetts, Amherst, also believes we are facing another major bailout if things don’t change soon. He said the “growth of student and auto loan debts relative to mass capacity to carry such debts” could be the cause. Admati points out that the Dodd-Frank Wall Street Reform and Consumer Protection Act, which came after the 2008 financial crisis and was meant to prevent another one from happening, hasn’t adequately changed how banks operate.

Goldman Sachs Group, Inc. Chairman and Chief Executive Officer Lloyd Blankfein; JPMorgan Chase Company Chairman and Chief Executive Officer James Dimon; Morgan Stanley Chairman John Mack, and Bank of America Corporation Chief Executive Officer and President Brian Moynihan, testify on Capitol Hill in Washington.