"You can blame the bankers all you want, but it is the government's job to prevent the financial sector from holding or exercising this kind of power over us.
The bigger picture is missing from Sorkin's book: "too big to fail" blow-by-blow accounts, but it is a recurrent theme in past due by journalist Peter Goodman. We can quibble about the relative importance of some details - such as the role of China's high savings rate in lowering global interest rates and feeding the American credit boom - in Goodman's highly informative account.
And, as Sorkin relates, it is hard to escape the conclusion that the rhetoric regarding our supposedly free markets without government intervention just masks the reality - that there is a revolving door between Wall Street and Washington, and powerful people bend the rules to help each other out.
The most significant result of the financial crisis is the emergence of six large banks that are undoubtedly too big to fall and therefore enjoy a strengthened government guarantee; Goldman, JP Morgan, Citigroup, Bank of America, Wells Fargo and Morgan Stanley are the beneficiaries of the doom loop. The most significant non-result is the fact that no comprehensive legislation has yet been passed to reform the financial sector. Without really serious reform, we have every reason to start counting down to the next financial crisis and to the next fleet of Mercedes lining up before the New York FED." End of quotes of the article. Well, such conclusion remains to be seen from empirical evidence as I would envision as an avid watcher of Sino-American economics in the days to come.
Francis Shieh aka Xie Shihao on Sunday, December 27,2009 at 9.46 a.m.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment