The big question this morning seems to be about TARP and regulations of the banks.
As you might remember I was not in favor of the bailouts in the first place. The Harvard Professor Elizabeth Warren on is making the case that the banks are #1 making too much profits and #2 only have the strength because of government guarantees.
Is it just me or would banks be closer to their actual value if we allowed nature to take its course and then let the actual market establish values based on, oh I don’t know some strange arbitrary figure like what they are actually worth?
As for profits, maybe I’m missing something but wasn’t the goal of bailing out the banks to keep them solvent? If that is the case isn’t it necessary and desirable for them to make profits? Do we not want people employed? Do we not want depositors to earn dividends and for 401k plans that have money invested in the bank’s stock to go up?
Even funnier is her statement about the new credit card regulation. She argues that we shouldn’t bother to read the new regulations since the companies have already found ways around them, so her solution is …New Regulations!
Presumably these new regulations will be magic so that the credit card companies will not be able to find a way around them.
I think the better suggestion would be to have a simple set of either “credit card holders bill of rights”. Instead of regulations that provide make-work for lawyers make a simple list of rights for card holders and enforce them rigorously.
But hey that’s just me.
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