Naomi Klein discusses the mortgage crisis and bank bailouts on MSNBC with David Shuster. September 12, 2008…(read more)
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Naomi Klein, renowned author, and political activist recently appeared on MSNBC to discuss the issue of bank bailouts. During the interview, she expressed her concerns about the long-term consequences of these bailouts and the systemic risks they pose to the economy.
Klein began by explaining that bank bailouts are often presented as necessary measures to stabilize the financial system during times of crisis. However, she argued that this narrative overlooks the underlying problems that led to the need for such drastic intervention in the first place.
According to Klein, bank bailouts are often accompanied by massive public debts. These debts place an enormous burden on taxpayers, diverting funds that could have been better allocated to public services and infrastructure. Furthermore, the bailout funds are often used to prop up irresponsible financial institutions, while leaving ordinary citizens to bear the brunt of the economic fallout.
Klein highlighted the flawed logic of this approach, emphasizing that the focus should be on addressing the root causes of financial crises rather than rescuing failing institutions. She suggested that policymakers should prioritize regulations that prevent risky behavior, rather than relying on bailouts as a quick fix to systemic problems.
The author also pointed out that bank bailouts create a sense of moral hazard, where financial institutions know that they can take excessive risks without facing the consequences. This, in turn, encourages a culture of recklessness and can lead to even greater financial instability in the future.
Klein called for an alternative approach to bank bailouts that focuses on holding financial institutions accountable for their actions. She proposed stricter regulations, higher capital requirements, and the implementation of measures like the Glass-Steagall Act to separate commercial and investment banking, fostering a more sustainable and responsible financial system.
During the interview, Klein emphasized the importance of taking lessons from previous financial crises and avoiding policies that merely patch up the system temporarily. Instead, she advocated for building an economy that prioritizes public welfare and long-term stability over short-term gains.
In conclusion, Naomi Klein’s discussion on MSNBC shed light on the problems surrounding bank bailouts and offered a different perspective on how to address financial crises. By urging policymakers to focus on prevention and accountability, she emphasized the need for a fundamental shift in how we approach the economy. Ultimately, this would lead to a more equitable and resilient financial system that benefits all members of society.
Well as far as Fannie and Freddie Mac both have had executives sued by the SEC for fraud related to subprime loans. These are the first charges brought against people connected to the financial collapse.
@rorygallard7 Shes not a complexity economics. Hell she isn't even a mainstream economist. I haven't read her books but I heard a sufficient amount of her utter ignorance to make a fairly informed construction of her beliefs.
Delousinal nonsense. Bush's ownership society never intimidated private issuers to make risky loans. That was Democrat policy: Fan, Fred. This woman is a liberal arts deg who knows nothing about economics. Gotta hand it to MSNBC.
Blame low interest rates. Cheap money finds it's way into asset classes every single time. Has been happening ever since we set up Central Banks to manipulate credit and currency. You can't write enough regulations if you have that incentive. Kill the Fed, you don't have artificially low rates driving bad investments and speculation and hence, no need for regulations. Naomi is a piss poor economist.
EasyEs, you don't really know what you're talking about. Thanks to Paul Martin, Canadian banks were *NOT* deregulated. They have to keep high risk assets on their balance sheets and therefore Canadian banks are doing better than most banks around the world. Regulation works, it's just about having a smart balance between too much regulation and too little regulation as has been the case subprime mortgage crisis, dotcom before, Enron, Long Term Capital Management, S & L, it's been a long list!
EasyEs – your right, bailouts are cover up for Bush & Clinton era see:
"Who Is Leo Wanta?
FollowThe money all the to "The Ante Chamber"
Goldman Sachs is the main one to check
I didn't read all of No Logo but I read shock Doctrine and it was terrible. She in some cases makes up facts and comes to some very flawed conclusions. The American financial markets didn't fail due to de-regulation. They collapsed because a declining export market took the rug out from actual value on banks balance sheets and all they had left were toxic assets left that were forced on them by the federal government.
Canadian banks had no laws preventing them from lending in this way.
Really? You believe what this women has to say?..seriously don't, you'll be better off.
Americans don't listen to this women. Us Canadians don't.
ohh
seen it yesterday! lets chat
why cant i see the video Jp
Market fundamentalists want to have their cake and eat it too. They want the government guarantees without the government oversight, and then when the whole thing comes crumbling down they want to rinse and repeat. ENOUGH.