by Bill McBride on 9/13/2009 06:49:00 PM
Sunday, September 13, 2009
From Bloomberg: Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman (ht Ron Wallstreetpit)
... “In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” [Joseph] Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”And on the economy:
“It’s an outrage,” especially “in the U.S. where we poured so much money into the banks,” Stiglitz said. “The administration seems very reluctant to do what is necessary. Yes they’ll do something, the question is: Will they do as much as required?”
"We’re going into an extended period of weak economy, of economic malaise,” Stiglitz said. The U.S. will “grow but not enough to offset the increase in the population,” he said, adding that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”Stiglitz also wrote a comment in the Financial Times: Towards a better measure of well-being and I think this comment is very important:
The Federal Reserve faces a “quandary” in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.
“The question then is who is going to finance the U.S. government,” Stiglitz said.
Too often, we confuse ends with means. ... a financial sector is a means to a more productive economy, not an end in itself.
excerpted with permission
Posted by Bill McBride on 9/13/2009 06:49:00 PM