His theory:
"In any case, natural monopolies or not, over time these markets appear to tend toward concentration rather than competition, and inherent and important market failures do not appear to self-correct..."
First, Mark Thoma is a tireless advocate of expanding the natural monopoly of Congress even though Congress takes 10 to 15 years to correct.
Second, the article is from Maxine Udall who complains that bankers are clueless. The bankers who appear before Congress are not clueless, they are talking to their major customer, the group that asks bankers to pass a $trillion/year in paper.
On what world does Thoma or Maxine believe that bankers are going to say anything else to their major customer? The bankers job has been to pass bad paper issued by Congress and they did their job to perfection. Bankers were even willing to engage in Fraud to serve Congress. They are not clueless, they get paid vast sums to appear before Congress and pretend there is no Fraud, the best pretense is ignorance. Congress members become millionaires by issuing bad paper, bankers earn millions by pretending the paper is good.
Bad paper results in Crashes, yes, we know that. But if Congress wants to issue bad paper, bankers will take us through the Crash.
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