Trying to prop up what’s here without more serious restructuring will have consequences:
‘The first is how our big banksters make money off all sorts of cons, besides encouraging consumption-based debt, in ways that create systemic misalignments between the financial interests of the major banks and the economic interests of everyone else.’
and:
‘It also illustrates how the major banks torque the economy because of how the Federal Reserve system actually works—a complete mystery, apparently, to the average American.’
And from the comments:
‘But there is a specific issue with the large “money center” banks in New York and the way they steer the New York Fed’s policy and the influence they have on the main Fed board and the FOMC. It’s the “Fed central” in DC and the NY Fed that are the problem.’
Also, if you have a few minutes, read Malcolm Greenhill’s post “Naive And Sophisticated Economics” about this very same issue, which is not good for Main Street:
‘Ah, you get the idea. I’m describing the Federal Reserve’s policy of penalizing savers and propping up declining asset values for the sake of poorly managed dysfunctional banks.’
Related: Arnold Kling From The Library Of Economics And Liberty: ‘My Perspective On The Budget Fight’…Richard Epstein At The Hoover Institution: ‘The Economic Ignorance of Barack Obama’…Jesse Walker At Reason Links To Ross Douthat: ‘”The Meritocracy As We Know It Mostly Works To Perpetuate the Existing Upper Class’…