Month: April 2012

This one’s only been sitting around for a couple of weeks. But read it in the context of the Mark Blyth interview I recommended. Nothing like a sensible framework to clarify one’s thoughts.

Simon Johnson:

The world’s largest banks have been accused of many things in recent years, including taking excessive risk in the run-up to 2008, doing great damage to the American economy by blowing themselves up and then working hard to resist any sensible notions of financial reform.

All of this is true, but it misses what is likely to be the most profound negative impact of the banks’ behavior on most Americans. The banks’ actions led directly to an increase in government debt, which in turn has made the reduction of that debt by “cutting runaway spending” a centerpiece of the Republican presidential campaign to date.

As a result of this pressure, Medicare now stands on the brink of being eliminated as a viable form of social insurance. Yet the executives who lead these banks – and the politicians with whom they work closely – will not be held accountable this election season.

I subscribe, via rss, to Christopher Lydon’s Radio Open Source. Truth is, I delete most of the interviews before listening, and I don’t get around to listening very often (as you’ll see in a moment). Lydon isn’t the greatest interviewer in the world, but he has great guests more often than most of these programs. So it is with Mark Blyth.

I just listened to an interview with Blyth from December 2010 (see? told you.), which I now see is the first of eight so far. Go thou and do likewise, is mostly what I have to say.

People want to say: look at those profligate governments, spending all that money. We’ve got to restore fiscal sanity. But it wasn’t fiscal insanity that got us here. It was private-sector leverage and the insanity of banking that brought us to this point. So the bankers put it on the state, and the state turned around it put it on the taxpayer. It’s the biggest bait-and-switch in human history.

Now to listen to the other seven.