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Simon Johnson and Robert Reich: Use Antitrust Laws to Break Up Too Big to Fails
I (and Tyler Durden) have previously argued that we should use antitrust laws to break up the too big to fails.
Since I made that argument, economists Simon Johnson and Robert Reich have both said the same thing.
Specifically, former head IMF economist Simon Johnson wrote:
Increasingly,
the issue of “too big to regulate” in the public interest is being
brought up – an issue that has historically attracted the interest of
the Department of Justice’s Antitrust Division in sectors other than
finance. Should Goldman Sachs now be placed in this category?
And former Secretary of Labor Robert Reich wrote yesterday:
Neither
the draft bill, nor the Committee, nor anyone on the Hill having
anything to do with financial regulation, is raising what I consider to
be the two key reforms necessary for avoiding another financial
meltdown -- resurrecting the Glass-Steagall Act that once separated
commercial from investment banking, and applying antitrust laws to the remaining five biggest Wall Street banks so none is "too big to fail."
Robert Reich, the worlds smallest Fascist.
It amazes me you people would give up one hell for another under this annoying turp. This shrimp Nazi would tax your soda two bucks a can and your beer four bucks a bottle. He came out in favor of the VAT on Krudlow Friday night.
Not that I should bother, but it seems to be remarkably easy to become a Nazi in your book. Perhaps the good folks at CDC who put this together are also in this category, or is the continuation of this your idea of what should make this country HUGE?
"Among adults, obesity prevalence doubled during 1980–2004, and recent data indicate that an estimated 33% of U.S. adults are overweight and 34% are obese, including nearly 6% are extremely obese (defined as BMI ≥40.0)"
http://www.cdc.gov/obesity/data/trends.html
http://www.cdc.gov/mmwr/pdf/rr/rr5807.pdf
They'll end up living longer than you when Armageddon comes. Maybe they'll even eat you.
Break them up. Shift what's left of their assets to all the smaller institutions who haven't engaged in risky lending. Write off all the bad debt. Taxpayers lose either way, through a declining dollar or lower home prices. It is morally wrong to shift this burden onto the backs of future generations.
Right on Robert Reich!!!
RR has proven with his outspoken truthtelling about the bankheist that has occurred in our country, that he doesn't care who likes or dislikes him for what he says and that truth is his policy!!! He is a hero to me and i pray for his strength and continues voice!!!
SJ has spoken the truth, but in the end, he has maimed himself by caring who he offends....i hope he can get past that. His blog was great until too many were insisting on "politely" discussing issues, while the country is getting robbed...and i ask, if a building is burning down, can you calmly discuss who should put out the fire? Unfortunately, the very honest and excellent seeds offered on the baselinescenario.com are often covered up with too much polite manure to have the air and opportunity to see the light, and this is a travesty for the potential of Simon and Jame's blog.
I totally agree with you about Reich. I was trying to have obvious sarcasim in my statement above. It's very unfortunate that his message will fall on deaf ears in DC. Because in DC it's about the interests of a few rather than the good of the people or the country. We're gonna be toast sooner rather than later if we don't wrest control away from the Oligarchy that is ruling this great piece of real estate.
Reich's book "Supercapitilism" is a must read IMO.
BTW I agree with the people who favor letting these big SOBs fail. Reich's stance is better than bailing their ass out but ultimately they deserve to fail, and if they suck the Squid down with them then better yet.
gossamer, i completely agree with you ...
if the bailouts weren't a crime against our country (and loans from the world), the ABSOLUTE robbing of anything left in US coffers, and loans for generations to come to pay, than sure, we can go on...but with crimes of this magnitude, unless equivalent actions to END THE PRIVATLY HELD FEDERAL RESERVES REIN OF TERROR, REVOKE TARP; CALL BACK THE MONEY; STOP ALL THE OTHER ACRONYM PROGRAMS THAT ARE ALSO CRIMES, OUR COUNTRY WILL FAIL...the words of these words from the Declaration of Independence apply in the most GLARING possible way, at this time in our history:
Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government
WHY ISN'T ANYONE USING THE WORD TREASON TO DESCRIBE THIS SCENARIO? WHY AREN'T PAULSON, AND BERNAKE, AND ALL THE MEMBERS OF THE CONGRESS AND SENATE WHO VOTED FOR TARP, BEING CALLED ON THE ACTS THEY COMMITTED WHICH WERE EFFECTIVELY TREASON?
It's only treason from THEIR perspective. When you control people any attempt to get out from under that control is seen as treason or betrayal. The FED is absolutely loyal to forcing it's system on every person on the planet. How dare we betray it? LOL
The average American is FAT and FUCKING STUPID. I feel your frustration, though.
They've already FAILED!!! They simply refuse to stop bothering people.
The little guy is going to be about as popular as Volcker if he keeps this stuff up. I think Larry, Rubin, Turbo Tim and the boys are looking for a more supportive company line that is more consistent with the Oligarchy's goals.
Or alternatively, they could be broken up using RICO.
Apocalypse Now- Robert Reich has just increased his stature in my eyes. Let's make sure it includes the GS of the world, otherwise this is just a plot to do away with the competition. It would be a sin to allow technically bankrupt companies to take over all the industries through foreclosures and bankruptcies - as investors (bailouts), the american people should foreclose on the banks.
There's a rather diligent fellow I read about
a while back who can shed light on the mortgage
securitization activities of the banks: Steve Dibert.
He runs MFI-Miami.com and has been investigating
mortgage fraud committed by banks and brokers.
What's interesting is that he's now investigating
whether the banks committed securities fraud when
creating the CDOs. Check out his recent press
release:
http://www.businesswire.com/news/home/20090915006491/en
Car companys had billion dollar problems while banks have trillion dollars problems and they weren't taken over and scrubbed out. Hmmm.
I'm worried that the loser car companies will be back for more money, even though they were able to shed debt during bankruptcy. It certainly wouldn't surprise me if they did.
This is one reason I firmly believe that repaid TARP funds should NOT be recycled, it will only create a precident for a perpetual TARP funding pool.
I'd bet even money GM/Chrysler go back for 2nd or 3rd helping of bailout funds. GM is far too complex, imo, and as could be seen with Saturn their viable options are to make trucks, Caddys, and crappy Chevettes.
The answer isn't to break them up, it's to let them fail.
Concur
+1
in free markets, anti-trust laws are unnecessary...they're just another means for government to short-circuit market corrections.
Robert Reich is possibly the most annoying human alive.
Uh huh - the "free market" crashed the World economy, and the government bailed-out the perps. What a wonderful world you live in.
Seriously 1
EXACTLY!!!
Exactly.