February 25, 2009

Demand Drastic Change of the Banking System

Economic literacy is important. For that reason, I maintain a list of Business/Econ web sites in the column to the right. Today I've added a new one, Baseline Scenario. It was co-founded by economist Simon Johnson. Simon Johnson, professor of global economics and management at MIT's Sloan School of Management. He is the former chief economist of the International Monetary Fund.

We have Bill Moyers to thank for guiding me to the Baseline Scenario site. Simon Johnson appeared in a segment on Bill Moyer's Journal, February 13, 2009. Here's a highlight:

Johnson explains ... that the U.S. financial system reminds him more of the embattled emerging markets he encountered in his time with the International Monetary Fund than that of a developed nation. As such, Johnson believes that the U.S. financial system needs a "reboot," breaking up the biggest banks, in some cases firing management and wiping out shareholder value."

It Continues...

Without drastic action, Johnson argues, taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes: "Taxpayer money is ensuring their bonuses. We're making sure that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable. It's not even good economics."

This will be a topic of GDAE Podcast, Episode 7. You might also want to see the Simon Johnson interview with Bill Moyers [Video], or read the transcript. If you're moved, then ... Do Something. Make your voice heard.



libhom said...

Cool. He agrees with my view that the CEOs should be fired.

readingnerd said...

Thanks for the tip on Simon Johnson. How can we draft him into the administration?
I've emailed all my federal representatives but have not heard back from them. Where is the outrage? How can anyone stomach this bailout while those who fleeced so unscathed? Are we waiting to feel the outrage until we are dead and buried and our grandchildren are starving or working in labor camps?

GDAEman said...

readingnerd, your comments are in the front of my mind 'cuz they're featured in Episode 7 of GDAE Podcast, which I'm finishing up.