Former IMF chief economist Simon Johnson warns: "We're running out of time ... to prevent a true depression."
Johnson says unless we break Wall Street's "stranglehold" we will be unable prevent the Great Depression 2.
Meanwhile, 43% of U.S. workers say they have less than $10,000 in savings, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey.
Wednesday, March 10, 2010
Sunday, March 07, 2010
One of the world's leading economists said that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt."
Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.
To Stiglitz, the core issue is that regional Fed banks, such as the New York Fed, have clear conflicts of interest -- a result of the banks being partly governed by a board of directors that includes officers of the very banks they're supposed to be overseeing.
The New York Fed, which was led by current Treasury Secretary Timothy Geithner during the time leading Wall Street firms like Citigroup, JPMorgan Chase, AIG, and Goldman Sachs were given hundreds of billions of dollars in taxpayer bailouts, presently has on its board of directors Jamie Dimon, the head of JPMorgan Chase. He replaced former Citigroup chairman Sanford "Sandy" Weill.
"So, these are the guys who appointed the guy who bailed them out," Stiglitz said. "Is that a conflict of interest?" he asked rhetorically.
"The reason you talk about governance is because in a democracy you want people to have confidence," Stiglitz said. "This is a structure that will undermine confidence in a democracy."
[Excerpt of a Huffington Post article]