Comments on: Choosing the Road to Prosperity

Choosing the Road to Prosperity

AElfwine Evenstar — Mon, 02 Apr 2012 20:48:30 -0800

One of the more conservative of the Fed's regional banks, the Dallas Federal Reserve, says "too-big-to-fail" banks must be broken up. Now. An interesting and important essay(pdf) from a most unlikely source.(via)

By: The Ted

The Ted — Mon, 02 Apr 2012 21:22:02 -0800

People think of the Fed as a monolithic inside-baseball organization, but as the essay illustrates there are real and honest debates going on behind the scenes by technocrats with dramatically different viewpoints. Comparing this to the decision-making process in Congress, it's no surprise that the fiscal response to both the recession and most real social problems has been unorganized, impotent, and partisan. This is also why we need the regional banks. This wouldn't fly in New York or the board.

By: Kris10_b

Kris10_b — Mon, 02 Apr 2012 21:35:08 -0800

Interesting report. I would have liked a bit more discussion on how they propose the TBTF banks would be broken up - would it be geographically, or would they be split into different business types?

By: KingEdRa

KingEdRa — Mon, 02 Apr 2012 21:45:00 -0800

Breaking up the TBTF banks would probably be as simple as reinstating the central provisions of the Glass Steagal Act-- seperate Investment Banking from Commercial Banking. I have no problem with an Investment Banker gampling with his money for his own profit. I do have a problem when he gambles with my money and I'm not seeing any of that profit.

By: mek

mek — Mon, 02 Apr 2012 22:01:52 -0800

Taibbi's analysis of this report: Push To End Too-Big-To-Fail Goes Mainstream

By: delmoi

delmoi — Mon, 02 Apr 2012 22:24:47 -0800

This is also why we need the regional banks. This wouldn't fly in New York or the board.

Yeah, I was about to say. No way would this happen in the NY Fed.

By: caclwmr4

caclwmr4 — Mon, 02 Apr 2012 23:07:25 -0800

"Too Big To Fail" used to be called "Antitrust", from 1890.

By: smackfu

smackfu — Tue, 03 Apr 2012 06:02:28 -0800

Well, antitrust is literally "Too Big To Fail", whereas these banks are "Too Big to Allow To Fail". Standard Oil didn't exactly need the government bailing it out.

By: b1tr0t

b1tr0t — Tue, 03 Apr 2012 06:18:49 -0800

Pedantic: No trusts were literally "Too Big To Fail." Anti-trust was the process of breaking them up.

By: Blue_Villain

Blue_Villain — Tue, 03 Apr 2012 06:58:41 -0800

Didn't we actually have this before. Or am I confusing Bank of America with Banc of America again?

By: bystander

bystander — Tue, 03 Apr 2012 07:26:30 -0800

So what politician will this line benefit?

By: Ironmouth

Ironmouth — Tue, 03 Apr 2012 07:46:53 -0800

Wonder how this could be effected. The idea is to do it in such a way as to not disrupt everything. You'd need legislation. Part one would require all banks to carry FDIC insurance to X amount. Part two would prohibit giving more than Y amount of FDIC insurance to any one corporate entity.

By: vibrotronica

vibrotronica — Tue, 03 Apr 2012 09:03:53 -0800

Fuck "not disrupting everything"! Like the fucking banks didn't disrupt EVERYTHING about our lives, finances and plans when they fucked up so badly that we all lot our jobs and they took all of our tax money? Fix the goddamned system or face the fucking guillotine.

By: atbash

atbash — Tue, 03 Apr 2012 09:04:30 -0800

So what politician will this line benefit? I realize you may mean to ask which politician commissioned it for their benefit, but I'm going to answer what you actually asked instead. Maybe Elisabeth Warren, if she decides to use it? She's the leading contender for the Democratic nomination against Scott Brown in .ma.us.