Comment to NPR story: Experts Say Bills Won’t End ‘Too Big To Fail’
I disagree. The new legislation uses higher capital requirements and lower leverage limits to control systemic risk. This is the right approach. It makes the entire financial industry less risky and more insulated from downturns. “Break up the banks” sounds more anti Wall Street and sounds tougher, but remember in the Great Depression 5000 banks failed in the early years. It is no better for 5000 small banks to fail than it is for 10 large banks to collapse. What counts is that all banks are more regulated with stronger restrictions. Canada has superbanks, among the largest in the world, but suffered no financial crisis and required no bailouts. Canada’s banks incurred losses, but they were small compared to resources of the banks, because regulators there expect banks to be better capitalized and they can demand bigger banks, which pose more risk the system, to meet higher requirements than small ones. For a comparison of Geithner’s plans and Canadian approach: https://marcivanseltzer.wordpress.com/2010/01/29/what-can-canada-teach-us-about-banking/
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Comment at NPR Planet Money about the Ugly Comment Trail There
Second comment on:
Experts Say Bills Won’t End ‘Too Big To Fail’
As to the comment trail here, I want to say that I respect the earnest Conservative vision of free-market capitalism and small-government individualism, but those who call President Obama a Socialist or Maoist simply illustrate their lack of education about the historical references they make and undermine the credibility of political arguments for libertarianism and against Progressive or Democratic-party principles. Obama, viewed reasonably, is no different than most Presidents who have attempted to solve problems of their time.
The differences between practical Republican and practical Democratic platforms, on the role of government and its financing, are not so different as they are made out to be in the public debate. There are differences and there are merits to Conservative and Liberal positions, but the key is to learn about the real distinctions and make the best choices among them. Instead, the current anti-Obama hatred is parroted from talking points for partisan political purposes, without getting the analysis, or as I say, even the terms, correct. It’s a shame, because good policy is a mix of Libertarian, Conservative, liberal, bureaucratic ideas put to practical use to meet specific real world challenges. http://wp.me/pm5qY-ig
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Tagged Conservative, Democrat, Liberal, Maoist, NPR Comments, Partisan Politics, Planet Money, Progressive, Republican, Socialist