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Regulatory Capture

There’s no reason to believe that what’s good for bankers is good for America. But bankers are different from you and me: they have a lot more influence. Monetary officials meet with them all the time, and in many cases expect to join their ranks when they come out on the other side of the revolving door. Also, it’s widely assumed that bankers have special expertise on economic policy, although nothing in the record supports this belief. ...
So we shouldn’t be surprised to see institutions that cater to bankers, not to mention much of the financial press, spinning elaborate justifications for a rate hike that makes no sense in terms of basic economics. And the debate of the past few months, in which the Fed has seemed weirdly eager to raise rates despite warnings from the likes of Larry Summers that it would be a terrible mistake, suggests that even U.S. monetary officials aren’t immune.
- Paul Krugman, Rage of the Bankers, NYT, Sept. 21, 2015


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