The difficulty of manufacturing consent on the bank bailout

Hi Justin,

If I might suggest a great book that sheds a lot of light on banking practices in this country?

Read Infectious Greed by Frank Partnoy.
http://www.amazon.com/Infectious-Greed-Corrupted-Financial-Markets/dp/0805075100

Almost all the financial innovation of the past thirty years is designed to avoid taxation and regulation. There are hundreds of pages of examples in this book which show the motives of the bankers and what happens when they get it wrong.

Usually, it's nothing. Accounting frauds are very difficult to prosecute, and the government picks up the tab.

Just a suggestion.
Will

Hello Justin,

I've been around of late but rarely commenting.

It is a tangent to this point really but i've had a tiny realisation lately about the media and economics/business. For the first time in several decades the majority of the population have suddenly realised that economics is a discipline with multiple competing schools of thought. That probably sounds silly to someone who specialises in it but it has come as a shock to many out here in the real world that there have been different ideas around economics and even competing theories of capitalism.

Most of the mass media coverage and dynamics for the last decade or more down here (in Australia) has been as though "economics" was a fixed thing and not a contested field and as though debates over issues of development, investment, taxes, government policy etc. were between "economics" and everything else rather than within the field.

It is one of the interesting consequences of the bust and the recession (which we are yet to technically enter down here) is that debates between economists are suddenly news.

Your thoughts?

Marcus (of Australia)

Thank you for admitting that this makes your head spin too. It really is hard to know what to believe and I think the administration makes it harder because it says one thing and then takes action that imply the potential for a different outcome.

I've stated my concern about this new toxic asset plan before, but I have to say the actions taken on the car industry give me more hope that you are correct about the administration's plans. I guess if you're going to do a test run on how to restructure a large, complicated, multi-national corporation with a large financing operation, it is easier to start with Big Auto as most of the players already expect a massive restructuring or a liquidation. If they really can hold fast and force necessary change, maybe it will be a blue print for our financial sector's future.