Back in July, former Citigroup CEO Sandy Weill — who is largely credited with convincing lawmakers in Washington to shatter the Depression-era regulations separating commercial banks from risky investment banks — said that the nation’s biggest banks should be broken up. This led to an outcry from Wall Street executives, who claim that banks need to be big and complex in order to be competitive.

But at least one more former Wall Street executive thinks that banks today are too big to manage. Former Bank of America executive Sallie Krawcheck said yesterday that the complexity of Wall Street banks “makes you weep blood out of your eyes“:

On Thursday, one former Wall Street executive put the issue in vivid terms as she raised concerns about the complexity of financial behemoths.

“It makes you weep blood out of your eyes,” said Sallie L. Krawcheck, who ran Bank of America’s wealth management division before a management reshuffling last year.

“If you look at the job of the board, if you look at the job of investors, it’s the concern about complexity,” she said, speaking from the stage at the Bloomberg Markets 50 Summit in Manhattan.

Before, during, and after the financial crisis, many people noted that banks have simply become too big to oversee effectively, a notion that was reinforced by JP Morgan’s $9 billion trading debacle earlier this summer. “These banks are not just too big to fail, they’re too big to manage,” Sen. Sherrod Brown (D-OH) told ThinkProgress. “I think these banks will be stronger and healthier and probably more profitable if they’re smaller.”

Krawcheck “did not endorse any one strategy to resolve banks’ complexity, but she said the proposal to break up banks and the regulation known as the Volcker Rule were two possible ‘means to an end.’” Republicans in Congress, though, are trying to ensure that the Volcker Rule — meant to restrict banks’ from trading for their own benefit with taxpayer-backed dollars — never fully comes into being.

In a speech today at the Family Research Council’s Value Voters Summit, House Majority Leader Eric Cantor (R-VA) assailed virtually every one of President Obama’s policies. He then offered a staunch defense of the economic benefits of marriage, saying, “Marriage has lifted more people out of poverty than any government program ever”:

We all know, as do most Americans in their hearts know, that the way for us to allow the pursuit of happiness is through individual effort. It is not through government program. And that is why we believe in traditional marriage, because marriage, more than any government program ever has or ever will, has lifted up people out of poverty, even those who felt there was no hope. Marriage has proven to be that formula which has been more successful at allowing for that pursuit of happiness. And that is why we stand tall and stand proud for traditional marriage.

Watch it:

For starters, as the Economic Policy Institute noted, when it comes to poverty, “the problem is a jobs and employment problem, not a marriage problem, as some commentators have suggested.” But this particular line of reasoning is interesting coming from Cantor, who has such a well-documented history of standing against same-sex marriage, despite its economic benefits.

When Washington state legalized same-sex marriage, conservative estimates of its potential economic effect were that it would add $88 million to the state and local economies in just three years and an additional $8 million in tax revenue. Even more impressive, New York City mayor Michael Bloomberg announced in July 2012 that same-sex marriage generated $259 million for the NYC economy in just one year.

Despite undeniable economic benefits, Cantor consistently acts against same-sex marriage, voting in favor of amending the Constitution to ban same-sex marriage and also to define marriage as an institution between one man and one woman. The Human Rights Campaign gives him a 0 percent rating on support for gay rights.

– Greg Noth

Our guest bloggers are Jon D. Wisman, Professor of Economics at American University, and Aaron Pacitti, Assistant Professor of Economics at Siena College.

Why, with the U.S. economy prospering over the three decades prior to 2007, did the quality of life for the overwhelming majority of Americans decline? Inflation-adjusted income more than doubled and wealth increased by 81 percent. So why did most people have to work longer hours and fall deeper into debt to make ends meet? Why did public services deteriorate?

The reason is that as the economy produced ever more, the very wealthiest Americans grabbed practically all of the gains.

Just how much did the rich grab? Between 1979 and 2007, inflation-adjusted income, including capital gains, increased $4.8 trillion — about $16,000 per person. Of this, 36 percent was captured by the richest 1 percent of income earners. The richest 10 percent captured 64 percent, almost twice the amount collected by the 90 percent below.

What happened to the gains in wealth was even more dramatic. Between 1983 and 2007, total inflation-adjusted wealth in the U.S. increased by $27 trillion. If divided equally, every man woman and child would be almost $90,000 richer.

But of course it wasn’t divided equally. Almost half of the $27 trillion (49 percent) was claimed by the richest one percent — $11.7 million more for each of their households. The top 10 percent grabbed almost $29 trillion, or 106 percent of the total. Meanwhile, the bottom 90 percent suffered an average decline of just over $16,000 per household.

What could be bought with the $29 trillion increase in the top ten percent’s wealth over the past three decades? Strikingly, it covers all of the expenses necessary for our future collective well-being — the very expenses that, we’re told, can’t be funded because of budget deficits and rising public debt.

The American Society of Civil Engineers estimates that the United States needs to spend $2.2 trillion over the next five years to meet its infrastructure needs. To ensure that Social Security can pay all promised benefits for the next 75 years would cost $8.6 trillion. Providing all needed Medicare funding for the next 75 years would cost a total of $4.6 trillion.

To pay for all Medicaid, the Children’s Health Insurance Program, and subsidies for purchasing health insurance through the Affordable Care Act for the next 10 years would cost $1.5 trillion. To close all projected federal budget deficits until 2021 would cost $7 trillion. Taking back the $29 trillion would cover all of these needs and the $5.1 trillion that would be left over could pay off about one-third of the national debt.

The rich managed to capture this $29 trillion because they gained greater command over the political process, which allowed them to engineer economic policy for their own gain. Their greater wealth meant greater command over the political process, which in turn made them wealthier. The explosion of corporate lobbyists and corporate campaign contributions leveraged their political influence.

The rich promised that everyone would benefit from deep tax cuts for the wealthy and welfare cuts for the less privileged. Deregulation, weaker unions, and freer trade, they argued, would make the economy grow more rapidly, creating jobs and raising everyone’s incomes.

But these promises never materialized. Between 1948 and 1976 — a period in which taxes were far higher, the safety net stronger, regulations stiffer, labor unions stronger, and inequality lower — GDP grew an average of 3.8 percent per year and unemployment averaged 5 percent. Since then, GDP growth averaged only 2.8 percent and unemployment averaged 6.4 percent.

Americans need a new social contract, one that partially recaptures the $29 trillion rip-off, offers protection against it happening again, and moves us toward a more equitable and democratic society. So how can we take back the rich’s ill-gotten gains?

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The 2012 Farm Bill is still languishing in the House, with GOP leadership in the chamber intentionally preventing action on the legislation for political reasons. According to the New York Times, “House leaders declined to take up either [the Senate or the House] version of the legislation. They are not eager to force their members to take a vote that would be difficult for some of them, nor would they wish to pass a measure largely with Democrats’ votes right before an election.”

But without a new five-year Farm Bill or at least a temporary extension of current legislation, the Department of Agriculture may be forced to shutter almost all of its operations.

The Farm Bill serves as a mass funding mechanism for the USDA — it provides funding for roughly 90 percent of the Department’s operations, meaning those operations may have to shut down if the Farm Bill isn’t renewed. According to the National Sustainable Agriculture Commission, the effect of even a temporary shutdown could be long-lasting:

USDA would be forced to occupy a multiple-month holding pattern, temporarily stopping many services and programs. Program administration involves a certain amount of planning and preparation, stakeholder input, rulemaking, and outreach. Even if program opportunities aren’t announced until later in the year, the preparation work that leads up to announcements takes time and certainty. Programs can’t simply be “turned off” and then “turned on” again with the expectation that program delivery and administration will not suffer.

The programs that the NSAC believe would be affected include “all the major programs for beginning and minority farmers, farmers markets, organic agriculture, renewable energy, and rural economic development” and new enrollment in the “the Wetland Reserve, Grassland Reserve, and Conservation Reserve Programs.” USDA programs funded by the Farm Bill are critical to addressing the crippling drought that has spread over four-fifths of the United States. The USDA also takes a lead role in shutting down brutal factory farms and administers the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), a cost-effective food assistance program for needy families.

This isn’t to say that the House bill is necessarily worth passing in its current form — the House version contains, among other things, deep cuts to critical food stamp programs. But failure to pass at least a stopgap necessary to keep USDA could have dangerous consequences.

The Romney campaign has been pushing back against a recent report by Innovation Ohio and the Center for American Progress showing that “millionaires in [Ohio] would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay $1,900 more in health care taxes and $1,066 more in taxes on their mortgages.” That report used data from a Tax Policy Center study showing that, if Romney were to keep his promise to reduce tax rates while maintaining government revenue, he would have to raise taxes on middle class families by more than $2,000.

In an attempt to refute the IO/CAP report, the Romney campaign approvingly pointed to a Tax Policy Center blog post saying that the math in Romney’s tax plan can’t possibly add up:

As part of his pushback, [Romney campaign spokesman Christopher] Maloney cited a blog by Tax Policy Center director Donald Marron saying, “I don’t interpret this (study by his group) as evidence that Governor Romney wants to increase taxes on the middle class in order to cut taxes for the rich, as an Obama campaign ad claimed. Instead, I view it as showing that his plan can’t accomplish all his stated objectives.”

Unless Romney is admitting that he will be breaking one of his tax plan’s key tenets if he gets into office, there is no way to make it add up without a middle class tax increase.

The Romney campaign has assiduously avoided laying out which tax deductions and loopholes it would close in order to cover the cost of its huge proposed reduction in tax rates. But the Tax Policy Center showed that even if Romney eliminated all tax preferences for the wealthy, he couldn’t pay for his plan without eliminating deductions for the middle class in such a way that middle class taxes would ultimately increase. And either the Romney campaign agrees, or it doesn’t understand the various analyses that have been released, if it is approvingly citing a statement saying that the plan’s math is suspect.