Now's the time to use anti-trust action to break up the big banks and insurance companies.

“Too-Big-to-Fail"  is "Too-Big-to-Begin-With!”

I’ve been blogging this idea about for well over 2 years (including letters to all my reps + Obama & Biden, several times here on Salon and elsewhere).

Endorsements?

One of Herman Cain's successors, retiring KC Fed Res Prez Hoenig is on board.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8344309/Kansas-City-Federal-Reserve-Bank-President-Thomas-Hoenig-calls-for-Wall-Street-banks-to-be-broken-up.html# 
And
http://www.moneynews.com/StreetTalk/Fed-Hoenig-Big-Banks/2011/08/16/id/407467

Also Robert Reich, who hints at it as an overlooked solution in his book “Aftershock.”
...and comes right out with it here:
http://www.huffingtonpost.com/robert-reich/break-up-the-banks_b_526106.html

How-to? 

Reich wants to cut each bank lengthwise and put lids on them.
My idea is more of a cross-cut.
Or we could do both:  slice and dice.

Reinstate Glass-Steagall (the lengthwise cut), says Reich.  This  separates consumer banking from investment banking within each bank.  Bravo!
He also wants to cap a bank's size at $100B in assets.   Not too keen on that method myself, but we could achieve much the same end with state- or regional- breakups.

My idea:  Regionalize (cross-cut) the banks in a manner similar to AT&T’s 1985 breakup, which can serve as both a model and inspiration.
The Trust Busting during the first two decades of the 20th century (cattle, steel, railroad, tobacco, oil trusts) will provide precedent as well.

Main legal vehicle:  The 1890 Sherman Anti-Trust Act.
Also see the 1916 Clayton Anti-Trust Act, which specifically addresses mergers and acquisitions.

Now, this may disappoint some Salon readers, but the goal here is not to punish the banks, but to create more competition between them.
(Any Tea Partiers out there?  Do you agree:  fair competiton is a base principle of Free Market Capitalism.)
Better local lending practices, increased employment and lower CEO pay will be happy by-products.
(Actually, let the stockholders pay their new CEOs as much as they dare… but no bailouts this time.)

And the timing couldn’t be better!
Most of the TARP money has been repaid now, all of it from the big banks we’ll be busting; only about $2B of principle left outstanding spread out among 500-odd smaller banks, most owing $100M or less.

Even though nearly all the $245B has now been paid back, the TARP bailout was an act of extortion upon the American people. 
 
Time now to Break up the Bigs so it’ll never happen again!