What's preferable? A policy acknowledging via market forces that certain institutions, vocations and investments offer diminished utility let alone no reason to exist or a pandering policy that enables Banks and their bloated, over paid execs to be nothing more than the retail provider of loans secured at wholesale Federal Reserve lending rates? We could encourage policy promoting critique' of sacred cows, self awareness, societal examination-dare I say enlightenment-or we can use the cheapest, oldest device known to mankind-cheat our creditors by redeeming them in worthless chit. Students of South America already know the answer.....
So I take it that you would applaud University of Chicago Economic's professor Austan Goolsby as Obama's Economic Chief?
Goolsby isn't "economic chief", he's the "staff director" of yet another economic advisory panel. Same kind of for-show appointment as the Volker one.
Can you cite one example where Bank Failures alone caused an intractable Depression? The Great Depression was made "Great" only by the dearth of Commercial Credit = no money supply. We're not tied to a gold standard, now-a-days. Plentiful credit is no longer an issue. As for Debt and Leverage, thats somebody elses problem! There's tons of smaller Banks and Investment Firms that didn't go heavy in subprime or short CDO. They're good to go. Now, we let creative destruction do its work, let weak Banks fail, massive layoffs, prices retreat, then Smart Money recapitalizes the Good from the Bad and we start afresh. Thats the way its always worked. Why is this time "different"?
Interesting that you highlight the SINGLE biggest reason why Bernanke was so slow in "reacting" to this crisis which is not just domestic, but GLOBAL in nature. He saw that banks were still able to raise capital, which did not happen during the Great Depression . . . He also didn't think that sub-prime was as "concentrated" on the balance sheets of the banking sector. Two big mistakes, that he recently admitted. And yes, this time is DIFFERENT for several of the points that I just raised above. Dearth of Commercial Credit? The money supply contracted during the Great Depression because it was tied to a completely absurd Reserve Note / Gold restriction. People wound-up exchanging their Reserve Notes for Gold and that then severely contracted the money supply.
Are you that ignorant? Or is your ignorance seated in your partisan politics? Your reading comprehension and listening ability is about as horrible as swtrader. The government is going to be deficit spending for the next 2 years . . . trying to balance the budget will come much later. In the meantime, there are those ridiculous Farm Subsidies that go to millionaire farmers that can certainly be cut from the budget. That is what Obama touched upon in his press conference the other day. But I guess your partisanship prevented you from making that "distinction".
It's not "the next 2 years", it's "yet another 2 years". How many times have we heard this same "commitment" over the past 30 years? I hope it happens, but am in the "I'll believe it when I see it" camp until there is actual evidence... Now I'm a partisan? The guy who is dubious on Obama's claims while calling out fiscal policy from "conservative" icons like Reagan is a partisan? You really have no idea what you're talking about...
I wouldn't go so far as to say "applaud'-Goolsby is not a traditional Chicago GSB theorist but he's a deep guy who will bring interesting debate to budgetary issues.
Then why not keep your trap shut until then??? Obama hasn't even entered the White House and won't be for another 2 months, and yet you are already making absurd comments from the peanut gallery. Interesting. In my opinion, he's assembled a pretty solid economic TEAM. I'm willing to be patient and withhold any ridiculous comments until he's actually been in office for awhile.
Random Capital is a hard guy to pin down politically-he's a VERY complex thinker-but to assert he's a partisan conservative is WAY off the mark. I would guess if he lived in America he would've supported Obama vs. McCain which isn't to say he's on the Obama kool-aid....