Truly an interesting read on some very controversial topics regarding the collapse of the housing market by David Stockman (seen here: http://finance.fortune.cnn.com/2013/04/04/david-stockmans-dystopia/). How do you feel about his views that banks are “wards of the state”? Should banks be required to give out x% of their reserves to small businesses/businesses worth less than $10 mil (for example) to stimulate growth? After all, the banks are borrowing at virtually 0% but that is not the rate that the average American gets.
Here’s a few more perspectives on his book, and if you fast-forward to about 3:15 in this video (seen here: http://www.youtube.com/watch?v=utq4g-vkY4k), you see that our buddy Paul Krugman thinks of Stockman’s work. What do you think? Should we dismiss Stockman’s analysis because of the lack of a model?
One Comment
Sorry not to reply immediately. Anyway, some of the big banks — SIFIs (structurally important financial institutions, Gary Stern, or “TBTF” too big to fail in popular jargon) are de facto wards of the state, recipients of money and still in bad health. Should they be made de jure wards, and kick out their management and wipe out their shareholders? I tend to think yes.
But small businesses aren’t somehow special, where they should be able to borrow for free. So without reading in detail, it’s a mixed bag.
Comments are closed.