Our opinion isn't that the Fed is an inherently bad institution any more than is the European Central Bank, the Bank of Japan, the People's Bank of China, or any other central bank.
The principle here is that the concept of free and efficient markets needs apply as evenly to businesses that fail because of, for example, offshoring as to business that make losing financial bets. Even the Japanese, famous for using public funds to support corrupt banks that made uneconomic loans to favored bank clients, allowed their second largest financial firm to go under in the early 1990s after their credit bubble popped. The head of the Japanese Ministry of Finance put it well when asked why the firm was allowed to fail: "Easy come, easy go."
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The principle here is that the concept of free and efficient markets needs apply as evenly to businesses that fail because of, for example, offshoring as to business that make losing financial bets. Even the Japanese, famous for using public funds to support corrupt banks that made uneconomic loans to favored bank clients, allowed their second largest financial firm to go under in the early 1990s after their credit bubble popped. The head of the Japanese Ministry of Finance put it well when asked why the firm was allowed to fail: "Easy come, easy go."
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