John Stossel of ABC news is actually starting to get it.
I'll have to admit that it is rewarding to see some in the media starting to wake up to the either total ineptness of this administration or it's absolute madness.
I'll also have to admit that I think it is pure madness, that they know exactly what they are trying to do and accomplish. What I don't think they expect is that American's will do anything other then roll over and play dead...
Anyway... John is catching on to their madness...
abc news
Geithner Moral Hazard
"The dominant public policy imperative motivating reform is to address the moral hazard risk created by what we did, what we had to do in the crisis to save the economy," Treasury Secretary Timothy F. Geithner said in an interview.
That's from today's Washington Post. The "moral hazard risk" arises when government encourages people to gamble by suggesting that government will rescue them if they fail. By bailing out the banks, the federal government has essentially declared to the world that they will do it again. That created a moral hazard.
It's refreshing to know that Administration is aware of the problem. But how do they plan to fight it? By:
... penalizing banks for being big. It would require large institutions to hold more capital and pay higher regulatory fees, as well as allow the government to liquidate them in an orderly way if they begin to fail.
So let me get this straight: The government has encouraged, and
in some cases forced, big banks to merge and grow bigger...but they propose now to penalize the banks for becoming too big.
On what planet does this make sense? The real way to fight moral hazard is to tell these banks that they will be allowed to fail...and then to have the courage to let them.
Meanwhile, these special rules for "big banks" make it harder for smaller regional banks to compete:
"To favor one class of financial institutions over another class skews the market. You don't have a free market; you have a government-favored market," [Camden Fine, president of the Independent Community Bankers of America] said. "We will never have free markets again if you have the government picking winners and losers."
Exactly.
I'll have to admit that it is rewarding to see some in the media starting to wake up to the either total ineptness of this administration or it's absolute madness.
I'll also have to admit that I think it is pure madness, that they know exactly what they are trying to do and accomplish. What I don't think they expect is that American's will do anything other then roll over and play dead...
Anyway... John is catching on to their madness...
abc news
Geithner Moral Hazard
"The dominant public policy imperative motivating reform is to address the moral hazard risk created by what we did, what we had to do in the crisis to save the economy," Treasury Secretary Timothy F. Geithner said in an interview.
That's from today's Washington Post. The "moral hazard risk" arises when government encourages people to gamble by suggesting that government will rescue them if they fail. By bailing out the banks, the federal government has essentially declared to the world that they will do it again. That created a moral hazard.
It's refreshing to know that Administration is aware of the problem. But how do they plan to fight it? By:
... penalizing banks for being big. It would require large institutions to hold more capital and pay higher regulatory fees, as well as allow the government to liquidate them in an orderly way if they begin to fail.
So let me get this straight: The government has encouraged, and
in some cases forced, big banks to merge and grow bigger...but they propose now to penalize the banks for becoming too big.
On what planet does this make sense? The real way to fight moral hazard is to tell these banks that they will be allowed to fail...and then to have the courage to let them.
Meanwhile, these special rules for "big banks" make it harder for smaller regional banks to compete:
"To favor one class of financial institutions over another class skews the market. You don't have a free market; you have a government-favored market," [Camden Fine, president of the Independent Community Bankers of America] said. "We will never have free markets again if you have the government picking winners and losers."
Exactly.
posted by XtnYoda at 4:33 PM
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