My biggest gripe against Obama? Not picking this man, Joseph Stiglitz, as his main economic advisor, instead of that Coke-addicted (I mean soda) Clintonian, Larry Summers.
Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has
failed to fix the underlying problems of its banking system after the credit
crunch and the collapse of Lehman Brothers Holdings Inc.
“In the U.S. and many other countries, the too-big-to-fail banks
have become even bigger,” Stiglitz said in an interview today in Paris. “The
problems are worse than they were in 2007 before the crisis.”
Stiglitz’s views echo those of former Federal Reserve Chairman Paul
Volcker, who has advised President Barack Obama’s administration to curtail the
size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last
month that governments may want to discourage financial institutions from
growing “excessively.”
A year after the demise of Lehman forced the Treasury Department to
spend billions to shore up the financial system, Bank of America Corp.’s assets
have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group
Plc, 43 percent owned by the government, has taken over the activities of HBOS
Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking
assets of insurer Fortis.
While Obama wants to name some banks as “systemically important”
and subject them to stricter oversight, his plan wouldn’t force them to shrink
or simplify their structure.
Stiglitz said the U.S. government is wary of challenging the financial
industry because it is politically difficult, and that he hopes the Group of 20
leaders will cajole the U.S. into tougher action.
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