Bill Moyers Journal this week interviewed MIT Economist Simon Johnson. "Johnson explains to Bill Moyers on the JOURNAL that the U.S. financial system reminds him more of the embattled emerging markets he encountered in his time with the International Monetary Fund than that of a developed nation. As such, Johnson believes that the U.S. financial system needs a 'reboot,' breaking up the biggest banks, in some cases firing management and wiping out shareholder value. Johnson tells Bill Moyers that such a move wouldn't be popular with the powerful banking lobby: 'I think it's quite straightforward, in technical or economic terms. At the same time I recognize it's very hard politically.'"
digby said, "The politics of this are complicated. Certainly, I don't think any more bailouts as they have been defined are politically possible. But Johnson believes it's urgent that the administration takes strong, quick action to "reboot" the system and makes a convincing case as to why. If he's right, they need to get it together because Geithner's presentation was universally panned by virtually everyone including the markets and the situation is deteriorating."
Johnson is one of the founders of The Baseline Scenario which I've found very helpful in explaining some of this stuff. Here's their Welcome to New Readers.
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