Monday, September 14, 2009
Why Obama Isn't Breaking Up the Insolvent Banks
Top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion.
There is no logical reason not to break them up.
So why isn't the Obama administration doing so?
For all of the wrong reasons:
- Nobel prize winning economist Joseph Stiglitz said yesterday that the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action
- Economic historian Niall Ferguson asks:
Guess which institutions are among the biggest lobbyists and campaign-finance contributors? Surprise! None other than the TBTFs [too big to fails].
- Manhattan Institute senior fellow Nicole Gelinas agrees:
The too-big-to-fail financial industry has been good to elected officials and former elected officials of both parties over its 25-year life span
- Investment analyst and financial writer Yves Smith says:
Major financial players [have gained] control over the all-important over-the-counter debt markets...
It is pretty hard to regulate someone who has a knife at your throat.
- William K. Black - the senior regulator during the S&L crisis, and an Associate Professor of both Economics and Law at the University of Missouri - says:
There has been no honest examination of the crisis because it would embarrass C.E.O.s and politicians . . .
Instead, the Treasury and the Fed are urging us not to examine the crisis and to believe that all will soon be well. There have been no prosecutions of the chief executives of the large nonprime lenders that would expose the “epidemic” of fraudulent mortgage lending that drove the crisis. There has been no accountability...
The Obama administration and Fed Chairman Ben Bernanke have refused to investigate the nature and causes of the crisis. And the administration selected Timothy Geithner, who with then Treasury Secretary Paulson bungled the bailout of A.I.G. and other favored “too big to fail” institutions, to head up Treasury.
Now Lawrence Summers, head of the White House National Economic Council, and Mr. Geithner argue that no fundamental change in finance is needed. They want to recreate a secondary market in the subprime mortgages that caused trillions of dollars of losses.
Traditional neo-classical economic theory, particularly “modern finance theory,” has been proven false but economists have failed to replace it. No fundamental reform can be passed when the proponents are pretending that there really is no crisis or need for change.
- Harvard professor of government Jeffry A. Frieden says:
Regulatory agencies are often sympathetic to the industries they regulate. This pattern is so well known among scholars that it has a name: “regulatory capture.” This effect can be due to the political influence of the industry on its regulators; or to the fact that the regulators spend so much time with their charges that they come to accept their world view; or to the prospect of lucrative private-sector jobs when regulators retire or resign.
- Economic consultant Edward Harrison agrees:
Regulating Wall Street has become difficult in large part because of regulatory capture.
4 comments:
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"This pattern is so well known among scholars that it has a name: “regulatory capture.” "
ReplyDelete"Scholars" have too much time on their hands.
Philosophers call it "human nature."
And like the smell of everyone's shit -it also applies equally -to all the stinking "scholars".
That's why real philosophers reject classifications and degrees of intellectual certification, -for their being nothing more than crude, narcissist puffing, -or worse- blatant name-dropping.
You can quote me there as "an anonymous Internet commenter".
The denotation "Harvard professor of government ..." or a "Manhattan Institute senior fellow" gives these commonly reckless bull-shitters no special moral guidance or exclusivity on the capture and expression of truths.
Generally, the contrary is true.
Both the profit motive and utter vanity are what gives humanity so much, so-called intellectual achievement. These artists of intellectual manure are colloquially called "Einsteins", before being asked to stuff a sock in it.
Some jackass-intellectual will shortly AGAIN come up with a grand paper explaining why he thinks everyone should support the -too big to fail- banks in this country, -possibly to the point where we all starve to death to keep these banks from going out of business.
-And his name will likely be "Krugman" again.
As the history of every theoretical chain amply describes, all theorists are exactly like the very best Texas liars, -mostly being just so incredible in their stories and their stance, it's difficult not to have your own opinion changed somewhat after the waving of arms, the cloud of dust and the smoke and mirrors are put away.
Your best response -is to give them loud enough applause -to force a bow, -and then- kick them as hard in the ass as you can.
That'll teach them something, -if seemingly- nothing else will.
call it what you want. i will call it fascism. when the govt. is controlled by the international corps, and the international banking cartels. then that is fascism. the only use of the govt. now is to protect the bankers, and globalized corps with our military. our soldiers shed their blood sweat and tears. for the profit of these globalized gangsters. ---plain and simple---this message was brought to you from main st. not wall st. k street, or c street.
ReplyDeleteObama eschewed public financing in the presidential race.
ReplyDeleteObama's largest contributions came from Wall St.
In the first 100 days of the Obama administration, the largest recipients of government bailouts was (surprise) the corporations that contributed most heavily to the Obama campaign.
The puppets change, but the puppet masters stay the same.
The establishment has already destroyed the free thinking society. Through the corporate owned media, they have blended establishment rhetoric with celebrity worship. The result is that if you speak out in opposition of their plans, you aren’t just rebutted, instead you are labeled a loon or a kook.
ReplyDeleteThese guys will look you in the face and tell you that global government doesn’t exist while they make every effort to implement it. They do this to people on a daily basis, and the millions of people who have bought into the MSM’s world of fantasy dismiss the most basic common sense while they applaud and scream about how dangerous these nutcases are.
This country is visibly collapsing in on itself. Our standard of living is in a free fall. I fear that soon the only two possible outcomes will be complete chaos or government tyranny.