Banks Too Big to Fail, Jail and Curtail: Reich

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June 30 (Bloomberg) -- Bloomberg's Erik Schatzker sits down with former U.S. Labor Secretary Robert Reich at the Aspen Ideas Festival to discuss immigration reform and the politics of inequality. (Source: Bloomberg)

Possibly do through executive action to fix the problem?

It is hard to figure that out right now.

Immigration is obviously very unpopular.

Obviously undocumented immigration is even less popular.

People within the united states right now are not in the mood to do anything international, whether it is immigration, foreign trade, or even foreign affairs.

Isolationism is creeping in because the job situation is still bad and most people's incomes are still dropping.

The president is a hard spot in terms of needing to take action on a lot of fronts without having any capacity through congress to do it.

Since i heard that he was going to explore executive action i have been trying to turn over in my head what he might do.

One thing that he may feel compelled to do is to talk about the humanitarian crisis of a lot of children who are undocumented and crossing into the united states right now.

It is a humanitarian problem that people have to see in those terms.

If you were in his cabinet, would you advise the president to explore this on the front of immigration?

It is not as though he has not come under enough scrutiny already.

I think i would be very cautious, politically.

The president does not have to run for office again.

No, but there is precedent to be set.

There is, but i was just going to say that we have a huge number in this country of undocumented workers, but very little pressure has been put on the employers and it seems to me that some sort of executive action that held employers more responsible for hiring undocumented workers who essentially cannot complain about working conditions that violate the law do not there.

That might be an important step to take.

The president's hands are tied when it comes to just about everything because congress is at a standstill.

You care deeply about the issue of inequality.

You made a movie about it.

What could government possibly due to address and a cup -- address inequality without tax reform?

That is part of it, obviously, also education reform.

Early childhood education is part of that.

Constraining wall street in terms of avoiding another too big to fail crisis that hurts the middle class and the poor, they paid a lot of that price.

It is also very important to look to ways in which infrastructure spending could be used to put more people to work.

Right now we still have a huge number of long-term unemployed.

The united states is facing a terrible problem with regard to infrastructure that is crumbling with deferred maintenance.

At the same time we can borrow money very cheaply.

Why not borrow money cheaply, put money -- put people to work and get our infrastructure to where it should be?

You would agree with larry summers on that point?

Absolutely.

It is a no-brainer.

You mentioned wall street.

I thought you would mention that.

I saw your face.

Has wall street not been sufficiently reined in?

What's the big tanks are still too big to fail, jail, and curtail.

I think the size needs to be limited.

I think we have to bring back glass-steagall.

The volker rule is so ridden with holes, it is worse than swiss cheese.

Efforts to bring blue -- bring back class steagall would surely be just as riddled with holes.

That is a defeatist proposition.

Or realistic.

Anything that we try will fail because of the power of the big tank.

Let me just say, the big banks are already being subsidized indirectly in terms of major depositors, major lenders assuming that they are too big to fail and therefore far less risky.

That is it tangible direct subsidy that will make the big tanks bigger and potentially more vulnerable to failing.

The word subsidy has not been used, but there is no question that it would appear that investors would benefit tremendously from the low interest rate policy of the federal reserve.

Is she making a dangerous trade-off by prioritizing inflation over employment?

I don't think that she is.

The federal reserve board has two mandates under the law.

Price stability and employment.

There is very little evidence of inflation are building up that is based upon price and wage bill that.

In fact, if anything there is not enough inflation.

When we get the kind that is based around economic roast, that is not bad, that is good, and she should not worry about that.

Thank you very much, bob.

Pleasure seeing you here.

Now a professor of -- now a

This text has been automatically generated. It may not be 100% accurate.

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