Populist Banking

Everyone knows that our current economic woes originated with big problems in mortgages and banking.  I have argued that while it might be interesting to know which straw broke the camel’s back, it’s more important to identify all the straws. This posting, although it consists of only fragmentary notes of an audio interview, provides an excellent inventory of the straws. It’s no great surprise to see that most of the problems originated with government. (Although I was surprised to see the culpability of state governments.) It’s not a surprise to see that the problems mostly have their origins in various populist “reforms” undertaken over the years. Given the extent of the problems, the vested interests in preserving the causes of the problems, and the popularity of the underlying problems, I am doubtful that the next banking crisis can be averted. Too many politicians appeal to “hard working Americans” with policies that ultimately leave those Americans unemployed, foreclosed, or at great economic risk. Populist promises sound good until you think about them. Fortunately for politicians, most people don’t burden themselves with too much thinking. This all adds weight to my belief: when populist politicians are afoot, watch your wallet.

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