Harvard historian sees banks, China dragging down U.S.Historians in the News
To a packed audience at the annual International Place Executive Event, hosted by Hub real estate developer Donald Chiofaro, Ferguson said that while we barely avoided a second Great Depression, the nation is still in deep trouble because no reforms have been made to its underlying financial problems.
He said the government needs to break up large banks with toxic assets, stop the explosive growth of debt, cut mortgage incentives and stop allowing the devaluation of the Chinese currency.
“We must stop the 10/10 proposition with China, where they get 10 percent growth and we get 10 percent permanent unemployment,” Ferguson said, adding that fixing this problem needs to be President Obama’s top agenda item when he next visits Beijing.
Ferguson dismisses the notion that the economic meltdown was caused by deregulation and greed, contending it was the corruption of the six major pillars of the financial system: banks, bonds, stocks, insurance, mortgages and globalization.
comments powered by Disqus
Stephen J Cipolla - 11/18/2009
"Ferguson dismisses the notion that the economic meltdown was caused by deregulation and greed, contending it was the corruption of the six major pillars of the financial system: banks, bonds, stocks, insurance, mortgages and globalization."
I am perplexed by this paraphrasal of Ferguson's remarks. Is he really contending that there is no causal nexus between deregulation of finanical markets the rampant corruption of the "six major pillars of the financial system."
The beginning of the article says that he feels that the "government needs to break up large banks with toxic assets, stop the explosive growth of debt, cut mortgage incentives and stop allowing the devaluation of the Chinese currency."
Damn right it does! But, that impersonal, institutinalized view of the crises is part of the problem.
Does Ferguson take the position that the "toxic assets" and the exotic mortgage-based securities were not driven by greed AND corruption, and could have not been stopped if regulators had had the tools to do so, and the political will. The basic formula underlying the financial debacle is simple enough: greed (which is a constant) + weak or non-existent regulation (also a constant) = financial corruption (another constant). The only variables are the extremes by any of these three factors. But, obviously, increasing financial regulation by ultimately prosecuting and jailing bankers and financiers would have a desirable effect on the other two factors. What is necessary to save finance capitalism (in addition to restructuring the commercial relationship with China, as to which I believe Prof Ferguson is spot-on) is much more strenuous and interventionist domestic legal and regulatory action. People, real flesh and blood human beings, are the ones who created the toxic assets and the huge mortgage debt. They have to go to jail for the damage they do to the economy for any economic regulation to be viewed as legitimate by the population that has been horribly hurt by these PEOPLE.
We must stop talking about institutions as though they are somehow not being run by other humans.
- Conservative historian Arthur Herman slammed for saying Obama is highly submissive to Putin and other strong leaders
- Intellectual historians to gather in October
- Yuri N. Afanasyev, Historian Who Repudiated Communism, Dies at 81
- History professor gives Pittsburgh, PA columnist an “F” for a op ed on slavery
- Sharon Ullman says the work of historians is becoming increasingly invisible