Politics
Out of context: Reply #6789
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- tommyo0
Kind of an interesting read about two schools of thought emerging on the future of banking.
'The Krugman Democrats opt for nationalizing today's troubled banks. The Summers Democrats counter that dramatic bank restructuring, including nationalization, could collapse the system. Instead, the Summersites favor turning big banks into something similar to local electric or water companies -- heavily regulated, unimaginative public utilities.
Given their recent spree of arrogance, stupidity and greed, bankers deserve as much. But would it be in America's best interest for banks to be talent-deficient utilities?
Our largest 10 banks control 75% of total bank assets. They channel pensions and other investable assets as well. If these banks start acting like utilities, they'll take far fewer investment risks. That will lead to less investment in business expansion, lower economic growth and higher long-term unemployment.
Few want to admit it, but economic prosperity and job-creation depend on financial risk-taking. Because of the credit crisis, we are moving from an era of reckless financial risk-taking to an ironically more dangerous era of virtually no risk-taking.'