Banks Win, Taxpayers Lose

happylux

Banks Win, Taxpayers Lose: Stiglitz Wants "National Debate" on Bernanke
Posted Aug 04, 2009 09:00am EDT by Aaron Task in Newsmakers, Banking

The S&P closed above 1000 for the first time all year Monday, continuing a five-month rally that many credit to the government's actions to support the financial system.

Even Nobel Prize-winning economist Joseph Stiglitz of Columbia University, a stalwart critic of the bank bailouts, admits the banking system is on firmer footing today. But that doesn't mean he's suddenly warmed up to the architects of the bailouts, notably Ben Bernanke, Tim Geithner and Larry Summers.

Among others, those three championed the deregulatory and easy money policies that helped cause the crisis. And none seems to have learned from past mistakes, Stiglitz says, citing their ongoing "deference to the financial sector."

Stiglitz believes we should have a "serious national debate" about whether Fed chairman Bernanke should be reappointed in January, suggesting in the accompanying video that a changing of the guard is appropriate.

"Even if you thought their strategy was right, we got a bad deal" as taxpayers, Stiglitz says. "What is clear is we spent much more money than we needed to [and] got back much less in return."

According to Stiglitz, the main result of the various and sundry bailout programs (both direct and indirect) was to refill the banks' coffers and reduce competition in the financial sector. That, in turn, has enabled banks to both charge higher rates and reduce their lending activities.

"The recovery will be slower because what's needed is more lending at more reasonable interest rates," the economist says. "That increase in lending - to small- and medium-sized businesses - just isn't there."

卜丁

1# happylux


支持老斯! 有良心有头脑的经济学家

keesa

Those bankers sold off market -300 pts when congress was debating the bailout last year.
This guy did not realize that taxpayers did not have another option since bankers are the creater, promoter and controller of the market.
Ironically,  this Nobel winner economist is also created by those bankers.

1# happylux

coexist

有敢说实话的了

yuelm2008

SO?

benshou

jungle monkey also wins

jackyking

ppteam

ding!

ksd9235

when are taxpayers not losers?