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Wednesday, January 22, 2014

The Needy and the Damage Done

Dean Baker, who I like to call The People's Economist, draws our attention to a NYT story on how three Dallas Federal Reserve economists are trying to measure the damage wrought by the cascading financial catastrophes set off by the fall of Lehman Brothers in 2008.  Bare minimum: $20,000 for every man, woman and child in the United States. But adding in "broader impacts on workers’ well-being" could raise the price tag to as much as $120,000 per American. Makes oversight and regulation to limit bank shenanigans seem like a worthy policy goal, right?

Good luck with that. The financial industry has mounted quite a successful legal campaign to slow down implementation of new financial rules meant to ensure banks bear the costs of their risky business, rather than us. As Baker points out:
Obviously these numbers are very speculative but the basic story is very simple. If you want to have a big political battle in Washington, start yelling about people freeloading on food stamps, but if you actually care about where the real money is, look at the massive wreckage being done by the Wall Street boys and incompetent policy makers in Washington.

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