Thursday, July 30, 2009
As I have previously documented, Larry Summers is a big fat idiot.
Unfortunately, idiocy is not limited to the White House economic team.
Barney Frank - the congress member taking the laboring oar in "solving" the economic crisis - is also a big fat idiot.
Frank is calling for credit default swaps to be limited to the giant "market makers".
Given that it was the giants trading in cds which brought down the economy (see this and this), Frank's proposal would be like saying that only convicted arsonists can work on the fire department's fire suppression team.
In May, I posted the following quote in arguing that the big banks had already killed meaningful regulatory reform:
“The banks appear to wish to maintain the intra-dealer market and raise barriers to new entrants to keep the OTC business [i.e. over-the-counter credit default swaps] as compartmentalized as possible and to protect their profitable market conditions,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. “The Street’s lobbyists appear to be asking for a ‘club’ structure in OTC trading.”...Frank wants to hand the banks the cozy little club structure they've been lobbying for.
I am not a weightist: Tim Geithner is a skinny little idiot, and Ben Bernanke is a medium sized bearded idiot.