The Economy Cannot Recover Until the Big Banks Are Broken Up

Sunday, December 12, 2010
By Paul Martin

by George Washington

A lot of people still haven’t heard that the economy cannot recover until the big banks are broken up.

In fact, virtually all independent economists and financial experts are calling for the big banks to be broken up, including:

•Nobel prize-winning economist, Joseph Stiglitz
•Nobel prize-winning economist, Ed Prescott
•Former chairman of the Federal Reserve, Alan Greenspan
•Former chairman of the Federal Reserve, Paul Volcker
•Former Secretary of Labor Robert Reich
•Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard
•Former chief IMF economist and economics professor Simon Johnson (and see this)
•President of the Federal Reserve Bank of Kansas City, Thomas Hoenig (and see this)
•President of the Federal Reserve Bank of Dallas, Richard Fisher (and see this)
•President of the Federal Reserve Bank of St. Louis, Thomas Bullard
•Deputy Treasury Secretary, Neal S. Wolin
•The President of the Independent Community Bankers of America, a Washington-based trade group with about 5,000 members, Camden R. Fine
•The Congressional panel overseeing the bailout (and see this)
•The head of the FDIC, Sheila Bair
•The head of the Bank of England, Mervyn King
•The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz
•Economics professor and senior regulator during the S & L crisis, William K. Black
•Economics professor, Nouriel Roubini
•Economics professor, James Galbraith
•Economist, Marc Faber
•Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales
•Economics professor, Thomas F. Cooley
•Economist Dean Baker
•Economist Arnold Kling
•Former investment banker, Philip Augar
•Chairman of the Commons Treasury, John McFall
•Leading bank analyst, Chris Whalen

Why do these experts say the giant banks need to be broken up?

Well, small banks have been lending much more than the big boys. The giant banks which received taxpayer bailouts have been harming the economy by slashing lending, giving higher bonuses, and operating at higher costs than banks which didn’t get bailed out.

The Rest…HERE

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