Citizens, Subjects and The Curse of Too Big To Fail Banking

    Celebrity CEO Jamie Dimon has made a compelling case against breaking up major US financial institutions. He cites the advantages inherent to economies of scale and claims that bigger banks are able to get better leverage out of their assets and thereby give average customers like little old me a better deal on financial products.

    What doesn’t get mentioned by Dimon and his entourage is the power of moral hazard, the implicit subsidy and the blackmail potential that all come implicitly with being a bank that is too big to fail. Without indulging in paranoia worthy of Beppe Grillo and looking for the Bankster under the bed, we still can make a reasonable case that bigger banks are given significant advantages that exempt them from the laws that mere mortals like little old me are forced to obey if we desire a peaceful life.

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    Why can’t we re-approve the Glass–Steagall Act?

    Just another question I thought I should ask, to flesh out and refine my viewpoint on the Financial Regulatory bill.  In much the same vain as my START conversation, I just want clarification on why Glass-Steagall, under which we had no financial crises, would not work now? I also support the idea of unregulated markets as much as anyone.  But if the people who are | Read More »