"Since its brith, the [US] has grappled with the problem of an over-mighty financial sector. With the exception of Alexander Hamilton, the Founders' vision was of a republic of self-reliant farmers and small-town tradesmen. The last thing they wanted was for New York to become the London of the New World--a mammon-worshipping metropolis in which financial capital and political capital were rolled into one. ... But now, barely a year after one of the worst crises in all financial history, we seem to have returned to the Gilded Age of the late 19th centruy--the last time bankers came close to ruling America. ... And what makes the losers in this crisis really mad is the fact that there's now one law for the small debtors and another one for big ones. If you lose your job and fall behind on your $1,500 monthly mortgage payment, no one's going to bail you out. But Citigroup can lose $27.7 billion (as it did last year) and count on the federal government to hand it $45 billion. ... Today it's the turn of Goldman Sachs to be likened to a 'great vampire squid.' To understand why, you need to go back 12 months. ... Despite much talk on both sides of the Atlantic of new financial regulation, the likelihood is that the most important flaw in our financial system will not be addressed. ... That flaw can be summed up in a single phrase: banks that are 'too big to fail.' Let's call them TBTFs. ... The TBTFs are able to pay crazy money because they reap all the rewards of risk-taking without the cost of going bust. ... What's needed is a serious application of antitrust law to the financial-services sector and a speedy end to institutions that are 'too big to fail.' ... Yet if the status quo persists, the danger of a populist backlash against both Wall Street and Washington will only grow. Such a backlash has more than one precedent in US history. ... TBTFs be warned. Old Hickory, where are you when we need you?", Niall Ferguson at Newsweek, 21 September 2009, link: http://www.newsweek.com/id/215178.
Amen. I would be honored to load our new Andrew Jackson's flintlocks.
2 comments:
IA... I thought you were "Ol Hickory" brought back from the grave.
Just kidding.
When I read that Alan Greenspan is now endorsing breaking up the TBTFs I realized that the Federal Reserve is catching the sounds of the indentured populace unhappy with the status quo...
What's to be done?
Who will go under the ax?
The giant banks or the Fed?
TBTF is an acronym for too centralized. The more central, the more political.
The years post Hickory were the best this country ever had. The Guilded age bastards screwed that up. We continue to suffer the consequences to this day.
Post a Comment