The Huntsmen Alternative

2 Dec

I’m not a Republican, but Huntsmen’s ideas about big banks make sense to me.

from the article:

“Mr. Geithner feared the collapse of big banks in 2008-9, but his policies have made them bigger. This makes no sense.

Every opportunity should be taken to make the megabanks smaller, and plenty of tools are available, including hard size caps and a punitive tax on excessive size and leverage (with any proceeds from this tax used to reduce the tax burden on the nonfinancial sector, which will otherwise be crushed by the big banks’ continued dangerous behavior).

The goal is simple, as Mr. Huntsman said in his recent Wall Street Journal opinion piece: make the banks small enough and simple enough to fail. “Hedge funds and private equity funds go out of business all the time when they make big mistakes, to the notice of few, because they are not too big to fail,” he wrote. “There is no reason why banks cannot live with the same reality.”

The path we are on leads to more state ownership of banks in Europe — not a good idea — and, in the United States, huge open-ended subsidies to private banks. Executives in those banks get the upside and American taxpayers and workers get the downside — a huge recession, damage to millions of lives and a huge run-up in government debt because of lost tax revenue.”


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