Re: Republicans Should Take Up 'Too Big to Fail'
Yes, Lou, it would be a capital idea for a GOP candidate to run on the idea of “stocking” key Treasury and economic posts with business entrepreneurs. This strategy would be a simple way of approaching a complex problem.
In the same vein, it would have been far better for President Obama to nominate Simon Johnson to head the National Economic Council (Larry Summers’s old post), rather than Gene Sperling. Sperling is qualified and all that, but his cosiness with too-big-to-fail finance sends a bad signal.
Johnson, on the other hand, understands the threat that a financial industry with a mainline to the U.S. balance sheet poses:
And Johnson gets, too, that the answer is not to rail impotently against big, bad finance (as politicians of both parties do), but calmly to make finance subject to market forces.
This approach, incidentally, would be good for finance in the long run, too. What’s good for JPMorgan Chase — having its bondholders thinking that they can lose money, and thus not suffocating it with cheap funds — really is good for America.
This piece originally appeared in National Review Online
This piece originally appeared in National Review Online