Mark Perry posts on a WSJ article about Calomiris’ thesis that banking dysfunction is entirely political (and thus, not at all caused by or solvable by regulations or functional changes such as limiting what kinds of businesses bank can be in).
I think it’s dead on. And you’ll hear echoes of this thesis in every one of Senator Ivy’s speeches and conversations about what he believes government should be doing – namely: less. Cronyism is created when government attempts to solve some supposed problem and distorts the market. Cronyism is created when one group gets preferential treatment. If you end that – end the ability for government to help one group of people or businesses – then you end cronyism. It’s very simple: the government needs to do less.