Thursday, April 2, 2009

The Quiet Coup Article in the Atlantic

I urge everyone to read an article titled The Quiet Coup by Simon Johnson in this month's Atlantic magazine. Mr. Johnson is a professor at MIT's Sloan School of Management and he was also the chief economist at the IMF during 2007 and 2008.

The article goes into great detail about the current financial crisis. Professor Johnson says that we face two major interrelated problems. The first problem is a desperately ill banking sector that threatens to choke off any incipient economic recovery that the fiscal and monetary stimulus might generate.

The second problem is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support. Big banks, it seems, have only gained political strength since the crisis began.

With the financial system so fragile, the damage that a major bank failure could cause is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington.

Gee, what a suprise - Wall Street banks and exploitation! The article goes on say that if this were any other country, the banks would have been nationalized by now. That is the solution - remove the scum bag senior management and nationalize the banks now!

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