A new report by a group of prominent economists this week warned that banks are still engaged in high-risk investing activity that is making another, potentially bigger financial crisis not only likely, but inevitable. The group includes Rob Johnson of the United Nations Commission of Experts on Finance, plus Elizabeth Warren, chair of the Congressional Oversight Panel to oversee the bank bailout. The report, commissioned by the Roosevelt Institute, points out how banks are using borrowed funds to take risks similar to the ones that crashed the economy in 2007 in order to continue to pay big dividends to share-holders and obscenely large bonuses to executives. The economists also urge the President and Congress to strengthen proposed financial regulations to stem the new crisis-in-making, and called out Federal Reserve Chair Ben Bernanke and Treasure Secretary Timothy Geithner for overseeing “policy as the bubble was inflating.” The report said, now “these same men now designing our ‘rescue.’” The report used unusually strong language to warn could happen if no action was taken: “What will happen when the next shock hits? We may be nearing the stage where the answer will be — just as it was in the Great Depression — a calamitous global collapse.”
Read the Roosevelt Institute’s report at http://www.makemarketsbemarkets.org/report/MakeMarketsBeMarkets.pdf
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GUEST: Max Fraad-Wolff, an instructor at the Graduate Program in International Affairs at the New School University who regularly writes on the economy
Max Fraad-Wolff's website is The New School
Source: Uprising Radio
Aired: 3/4/10 12:00 AM
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