Mr. Posner is a federal circuit judge and a senior lecturer at the
University of Chicago Law School. He is the author of the
just-published
"A Failure of Capitalism: The Crisis of '08 and the Descent into
Depression" (Harvard University Press).
http://online.wsj.com/article/SB124165301306893763.html
The Wall Street Journal, 7 May 2009, page A17.
Joe Gwinn
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Fascinating...
Perhaps, but it's largely nonsensical and in some instances, just
innacurate.
Posner apparently doesn't understand what constitutes a "demand
deposit"
account.
He's right about one thing, at least. What we are seeing in the worlds
of
finance and economics coldn't have happened without the active and
passive
assistance of government.
JC
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John (et al),
At what point does it become possible to "just say no" to government
involvement?
------
When you are not depending on the government to keep your
businesses from collapsing, your buildings from burning down,
etc.
The banks (commercial and investment), quasi banks, brokerages,
insurance companies, credit card companies, etc. created this
entire asset bubble problem, putting the world on the verge of an
uncontrolled deflation/depression and now everyone is paying the
price.
The "stress test" results are out, but the single most important
comment/observation IMNSHO is that "Together, the 19 firms that
took the test hold two-thirds of the assets and half the loans in
the U.S. banking system."
http://news.yahoo.com/s/ap/20090508/...1bIdjmK yBhIF
Note that one of the 19 is GMAC which is now a bank [now wholly
owned by Cerberus]. GMAC is expected to play a key role is the
financing of both Chrysler and GM vehicle purchases and leasing,
but was heavily involved in sub prime lending under Diatech
Funding and ResCap [Residential Capital]. By all objective
standards GMAC is bankrupt, but is likely to get another big wad
of taxpayer cash.
GMAC is not owned by Cerberus. At one time it had more than a 50% stake in
the company but now it's ownership has been reduced to 9.9% as part of the
deal. So things are constantly in flux. As for more government money, that
may come. But if it means credit will keep flowing and it will allow people
to buy, and more importantly, to finance new car purchases that will be a
good thing. Bottom line is that as bad as the financial situation was the
new administration is taking the necessary steps to fix the problems. But no
matter how well they do it for some folks it will never be good enough and
they will never give them the credit they deserve. By the way, those folks
are called republicans and they are the people who created the mess Obama
has to clean up.
Hawke