The Obama administration remains opposed to federal control. Mr Geithner last week said: “Governments are terrible managers of bad assets.”
Others say he may eventually face no choice. “The danger we face is a Freddie Mac/Fannie Mae scenario where government gives the banking sector guarantees and then socialises the losses,” says Adam Posen, an economist. “That’s the worst thing we could do.”
Wednesday, February 18, 2009
Adam Posen: I do not lack all conviction.
the FT today:
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3 comments:
Can somebody please explain how the government can do worse than the banks?
Briggs?
Obviously, they cannot do worse. The government should take over the banks and operate them in the interest of all the people.
Well, one could argue government caused the problem in the first place - W advocating the "ownership society" that led to the housing bubble. Now one could argue that that was dumbya's government and that Obama's will be better, but nevertheless it is possible for us to elect a government that does something we want in the short run (make us all homeowners) but then screws us up in the long run.
In other words, government does what the people want, which is not necessarily the correct thing to do, and that's why they can do worse than the current bank managers.
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