3 ms·

Not bailing them out would be ruinous for the economy, which therefore means they must be heavily regulated. This half-implemented system of privatized gains an

• SkyMarshal 6y ago
  There are other alternatives between allowing the economy to collapse and bailing out Wall Street. One proposed by a Harvard Professor during the GFC was to create an Economic Development Bank of the US, seed it with the TARP money instead ($700B), and give it the mandate of financing productive growth activities (as opposed to asset speculation or consumption). The money multiplier effect implies that $700B could multiply into $7T worth of liquidity injection into productive growth activities. Another similar model is the Japanese post-WWII industrial development model, where a central bank or Ministry of Finance finances local regional banks as they support rebuilding and industrialization of their local economy. Google the economist Richard Werner for more on this model. All this can be done while letting big Wall St. banks fail and taking them into receivership similar to the S&L crisis. There is precedent for all of this, it’s nothing new. And certainly more options than Wall St. self-servingly presents.