Too stupid to Stop
Some thoughts on Too big to Fail, by Nomi Prins.
This morning, amidst news of Moodys cutting Greece’s debt rating to Caa1, I came across a phrase I wish I’d thought of first, reading through a friend’s morning commentary. The phrase? “Too Stupid to Stop”.
According to Bill Blain, Senior Director at Newedge in London, and self-professed Euro skeptic, “‘Too Stupid to Stop’ is based on politicians behaving as rational maximisers of their electoral objectives.” He was referring to the real reason behind all the bank-demanded bailout loans for austerity measures throughout Europe.
In the United States, that mantra can be extended to include appointed officials, like Treasury Secretary, Tim Geithner (still not admitting our record debt increase came directly from the $4 trillion worth of Treasury issuance and other forms of assistance extended to our banking system since late 2008, as we endure his stomach-churning ‘show-begging’ to the GOP for a debt cap raise) and Fed Chairman, Ben Bernanke (ditto). It also, of course, applies to congress people whose political survival depends on corporate and bank contributions and financial support, the ones that believe the Dodd-Frank bill changes anything.
Rather than considering how governments have systematically done, and continue to do, the wrong (as in immoral, unfair, and uneconomically sound) thing by trying to preserve banks, any politicians possessing the ability to think independently (an oxymoron, I know) should be asking themselves instead, how clever they could be about closing them down. Take a cue from Iceland.