Thursday, December 29, 2011

The Dummies Want You To Think That It's the SIZE of Government That Matters, Not Who Controls It (And How Continuation of Bonuses RULES!!!)

What do you think is the most pressing issue of our time?

Better take a gander at the facts first.

And leave the rightwingnut fictions behind.

(Warren Buffett wasn't kidding about his paying a lower tax rate than his clerks.)

Robert Reich's Blog 

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock.

Ever wondered why the banksters fought so hard against the capitalization requirement?

Right. You should have known all along it was the $$$$$$$$$$$$$ (bonuses).

Real Reasons Bankers Don’t Like Basel’s Rules: Clive Crook – Bloomberg. Why bankers’ whining about higher equity requirements is just that:

A much-cited paper
by Stanford’s Anat Admati and colleagues — “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity Is Not Expensive” — should have ended this debate once and for all. It dismantles the banks’ position step by painstaking step.

The study makes the crucial distinction between the interests of bank managers, bank shareholders and the public at large. Managers are being disingenuous. They do have reasons, valid after a fashion, for opposing higher capital requirements, just not reasons they can admit. The one they emphasize — cost of funding and its effect on future lending — is fit for public use, but bogus.

What might their real reasons be? If banks sell more shares, it’s true that the return on equity will fall. If managers’ pay is tied to return on equity (as it often is), they will be worse off. Shareholders, on the other hand, shouldn’t mind, because the risk of their investment is reduced in proportion.

of course, would be better off — less likely to be stuck at some point with the cost of bailing out the bank.
The paper is here.

Cross-posted at Angry Bear

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