I heard this interview this morning and was astonished by what I heard. Now, I'm an economics/finance neophyte so up to this morning I only imagined I understood what was going on. But this interview opened my eyes to what we're really up against!
Bio of Simon Johnson--
Professor Johnson, British born and educated, is now professor of entrepreneurship at the Sloan School of Management at Massachusetts Institute of Technology, and a senior fellow of the Peterson Institute for International Economics in Washington DC.
But in 2007 and 2008 he was chief economist at the International Monetary Fund, and he is familiar with the kind of economic nervous breakdowns that send nations scuttling along to the Fund with requests for help.
The finance industry has effectively captured the US government. Recovery, says Professor Simon Johnson, will fail unless the financial oligarchy that is blocking essential reform is broken. And, if a true depression is to be avoided, he says, we need to act quickly. He joins Peter Day for Global Business to discuss his ideas.
BBC - Global Business (25 min.)
Also related to interview...
Consequences
And more than a million readers have now downloaded an article he wrote in the May issue of the American magazine Atlantic exploring how investment banks and bankers have systematically managed to capture much of the American economic and regulatory system over the past 30 years..rather like the “military-industrial” complex that President Eisenhower warned about in his farewell speech to the nation in 1961.
As in Russia, Wall Street’s own oligarchs have too much power and influence, and they have been blocking reform.
Updating that article, Professor Johnson tells me that he is now less fearful than he was then that the current recession will be worse than that of the 1930s, because of the impact of the emergency spending measures taken over the past year.
But his fears about the power and influence on government and regulators of the bankers have not been lessened, and it is more than just the big fat bonuses which get so much attention.
What politicians gathered at summit conferences have to deal with now is not just the factors that led to the credit crunch bubble and its bursting, but also the consequences of the emergency measures they took to bail out the system.
We got into trouble because banks had become Too Big to Fail..but to rescue them from failure we have created even bigger banks which if nothing changes will fail with even more damage than their predecessors. Something wrong there..and dangerous.
BBC - Bankers on the Brink