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Bernie Sanders ought to like what’s happening to the banks

The fat-cat bankers aren’t so fat any more.

Once empowered to mint money, the nation’s big banks are now mired in an earnings recession that raises doubts about their long-term profitability. First-quarter earnings compared with a year earlier plunged by 60% at the vaunted Goldman Sachs (GS) and 53% at rival Morgan Stanley (MS). At J.P. Morgan Chase (JPM), the biggest U.S. bank by assets, revenue and profit were both down 7%. First-quarter profits fell at all six of the biggest banks, in fact. Here’s a breakdown of key measures in the first quarter of 2016, compared with the same period in 2015:

Nobody needs to worry whether the big banks can turn a profit; they’ll be fine on their own. But it seems odd that the one industry attracting the most scrutiny in this year’s presidential race is one in which profits are sinking, the cost of complying with new regulations is up sharply, and the odds of a catastrophic failure may be lower than they have been in decades.

Presidential candidate Bernie Sanders, of course, has marshaled the attack on big banks, insisting they be “broken up.” But Sanders’s premise is that the banks represent the same risk to the U.S. economy they did in 2008, when bank losses tied to subprime loans triggered a financial meltdown and near-depression. Largely unseen by the public, however, are new rules that are constraining the risks taken by Wall Street banks, effectively making them safer. The evidence those rules are working? The...