I recently posted an article by Simon Johnson, former director of research for the International Monetary Fund. Apparently, this article has been somewhat of a beacon for those trying to understand why the government hasn’t been aggressively restructuring banks, instead of aggressively bailing them out with taxpayer dollars.
Bill Moyers had Mr. Johnson on his weekly Journal. This is available online and definitely worth watching. The content covers much of the same ground as his article, but his conviction is much more apparent on screen.
A telling statistic cited in the interview by Mr. Moyers was that every Congress person sitting at the recent hearing that questioned bank executives had received donations from financial corporations. It is not surprising, given the extent of the role of finance in our economy, but it is telling all the same about the difficulty of government impartially dealing with the financial mess.
Barry Ritholtz (Big Picture), a persistent critic of bailouts, recently featured Simon Johnson’s appearance on Bill Moyers Journal on his blog.
Arianna Huffington has also highlighted that the government is refusing to do the obvious because those in charge are hand maidens of the financial sector.
What makes Mr. Johnson’s article compelling is that he identifies the root of the difficulty in dealing with the financial crisis: the long, profitable success of the financial sector has allowed it to create an entire intellectual and political superstructure devoted to justifying its excesses. More on this later.
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