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A lame excuse designed to cover blue team's complete disinterest in breaking up the TBTF's.
"blue team had the opportunity to do something with the banks in 09-10"
no, what blue team really had has blue dog senators that precluded 60 votes.
A lame excuse designed to cover blue team's complete disinterest in breaking up the TBTF's.
I didn't say the Dems would have broken up the TBTFs, you did.
I said if TBTF breaking up were to come, it would come from the Dems and never the Repugs, but even if the Dems wanted to, they couldn't get 60 in the Senate due to DINO blue dogs.
Yet the majority of the political opposition to bailing out the TBTF's came from republicans and I can think of at least two republican presidential candidates who are at least talking about breaking up the TBTF's.....
Volcker is for it, there seemed to be a pretty decent chance of getting some republican support for it. The situation seemed right for Obama to at least make an attempt at breaking up the TBTF's, but no.............
Politico just did a bit on Hoenig
Looks like he was more or less right about asset bubbles, inequality and the unremovable punch bowl of QE.
While Hoenig was concerned about inflation, that isn’t what solely what drove him to lodge his string of dissents. The historical record shows that Hoenig was worried primarily that the Fed was taking a risky path that would deepen income inequality, stoke dangerous asset bubbles and enrich the biggest banks over everyone else. He also warned that it would suck the Fed into a money-printing quagmire that the central bank would not be able to escape without destabilizing the entire financial system.
https://www.politico.com/news/magazi...reserve-526177For Hoenig, the most dispiriting part seems to be that zero-percent rates and quan ative easing have had exactly the kind of “allocative effects” that he warned about. Quan ative easing stoked asset prices, which primarily benefited the very rich. By making money so cheap and available, it also encouraged riskier lending and financial engineering tactics like debt-fueled stock buybacks and mergers, which did virtually nothing to improve the lot of millions of people who earned a living through their paychecks.
In May of 2020, Hoenig published a paper that spelled out his grim verdict on the age of easy money, from 2010 until now. He compared two periods of economic growth: The period between 1992 and 2000 and the one between 2010 and 2018. These periods were comparable because they were both long periods of economic stability after a recession, he argued. The biggest difference was the Federal Reserve’s extraordinary experiments in money printing during the latter period, during which time productivity, earnings and growth were weak. During the 1990s, labor productivity increased at an annual average rate of 2.3 percent, about twice as much as during the age of easy money. Real median weekly earnings for wage and salary employees rose by 0.7 percent on average annually during the 1990s, compared to only 0.26 percent during the 2010s. Average real gross domestic product growth — a measure of the overall economy — rose an average of 3.8 percent annually during the 1990s, but by only 2.3 percent during the recent decade.
The only part of the economy that seemed to benefit under quan ative easing and zero-percent interest rates was the market for assets. The stock market more than doubled in value during the 2010s. Even after the crash of 2020, the markets continued their stellar growth and returns. Corporate debt was another super-hot market, stoked by the Fed, rising from about $6 trillion in 2010 to a record $10 trillion at the end of 2019.
And now, for the first time since the Great Inflation of the 1970s, consumer prices are rising quickly along with asset prices. Strained supply chains are to blame for that, but so is the very strong demand created by central banks, Hoenig said. The Fed has been encouraging government spending by purchasing billions of Treasury bonds each month while pumping new money into the banks. Just like the 1970s, there are now a whole lot of dollars chasing a limited amount of goods. “That’s a big demand pull on the economy,” Hoenig said. “The Fed is facilitating that.”
This is what we did in the 1980s and 1990s. Sent insolvent banks into receivership.
In the Great Recession, Obama "saved" the banks and sent homeowners into receivership.
Board conservatives here mostly blamed the borrowers instead of lenders or monetary policy, and were horrified by suggestions to break up banks that lent money irresponsibly, because that would be socialism, even though government receivership has been the fix for failed banks in the US for 85 years.
After his retirement from the Fed, he served as stint as vice chairman of the FDIC, where he pushed an unsuccessful proposal to break up the big banks
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