Posts Tagged ‘Jon Huntsman’

Michele Bachmann was the first GOP presidential candidate to demand Eric Holder’s resignation. Last Monday Rick Perry published an op-ed in The Washington Times demanding Mr. Holder’s resignation and yesterday morning Jon Huntsman also remarked that Mr. Holder should resign, yet the majority of the Old Media ignore them and the other congressmen who think Mr. Holder should resign.

Read more by Mary Chastain at BigJournalism.com

The idea that big banks damage the broader economy has considerable resonance on the intellectual right. Thomas Hoenig, the recently retired president of the Federal Reserve Bank of Kansas City, has been our clearest official voice on this topic. And Eugene Fama, father of the efficient markets view of finance, said on CNBC last year that having banks that are “too big to fail” is “perverting activities and incentives” in financial markets - giving big financial firms “a license to increase risk; where the taxpayers will bear the downside and firms will bear the upside.”

The mainstream political right, however, has been reluctant to take on the issue. This changed on Wednesday, with a very clear statement by Jon Huntsman in The Wall Street Journal on regulatory capture and its consequences. Before the 2008 financial crisis, he wrote, “the largest banks were pushing hard to take more risk at taxpayers’ expense.” And now, he added:

This message could work politically, for five reasons.

First, for anyone on the right of the political spectrum who thinks at all about the issues, this is a coherent and appealing position. Mr. Fama had it exactly right when he said, in the same interview that “too big to fail” “is not capitalism; capitalism says - you perform poorly, you fail.”

“Too big to fail” is not a market-based concept; it’s a government subsidy scheme - of the most inefficient and dangerous kind.

–SNIP– Second, serious senior figures within the Republican Party have long been pointing in this direction. In 2009, for example, former Treasury Secretary Nicholas Brady said, “First we should just come out and say it: the financial system that led us to the brink of disaster is broken.” And former Secretary of State George P. Shultz has emphasized that we should “make failure tolerable,” suggesting, for example, “an escalating schedule could be required of necessary capital ratios geared to size and matched with escalating limits on leverage.”

Republicans like to discuss who is and is not a true Republican. How can any true Republican condone the subsidies that underpin our biggest financial companies today?

Read more by Simon Johnson from the NY Times via Yahoo Finance