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Jakarta Post

America's socialism for the rich: Corporate welfarism

  • Joseph E. Stiglitz

  /   Tue, June 9 2009   /  10:47 am

With all the talk of "green shoots" of economic recovery, America's banks are pushing back on efforts to regulate them. While politicians talk about their commitment to regulatory reform to prevent a recurrence of the crisis, this is one area where the devil really is in the details - and the banks will muster what muscle they have left to ensure that they have ample room to continue as they have in the past. The old system worked well for the banks (if not for their shareholders), so why should they embrace change? Indeed, the efforts to rescue them devoted so little thought to the kind of post-crisis financial system we want that we will end up with a banking system that is less competitive, with the large banks that were too big too fail even larger. It has long been recognized that those America's banks that are too big to fail are also too big to be managed. That is one re...