LET ... INSOLVENT ... BANKS ... FAIL
George Washington
The Congressional panel overseeing the bailout is blasting the government's approach, saying that the government has to close insolvent banks. Some quotes from the panel's new report:
All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets...
[Bank liquidation would be] least likely to sap the patience of taxpayers [and] provides clarity relatively quickly [to the markets]....
Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal.
The following experts agree that the insolvent banks should be liquidated to save the broader economy:
- The recently retired President of the St. Louis Fed, William Poole.
- Nobel prize-winning economist Ed Prescott
- Nobel prize-winning economist Joseph Stiglitz
- Economics professor and senior regulator of the S & L crisis, William K. Black
- Highly-regarded PhD economist Michael Hudson
- PhD economist Marc Faber
- The central banks' central bank, BIS
- Many other leading economists
The choice could not be more clear: Break up the insolvent banks in an orderly manner, or the economy will not recover for many, many years.
[Original]
Author's Website: www.WashingtonsBlog.com
Author's Bio: George Washington George Washington is a pen name. I am using the pen name, with the approval of the publisher.
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