Mar. 16th, 2009

crankynick: (Default)
Awesome article from the New York Times arguing that risk taking that's led to the current crisis isn't so much "moral hazard" as sytematic looting of the public purse.

What happened? Banks borrowed money from lenders around the world. The bankers then kept a big chunk of that money for themselves, calling it “management fees” or “performance bonuses.” Once the investments were exposed as hopeless, the lenders — ordinary savers, foreign countries, other banks, you name it — were repaid with government bailouts.

In effect, the bankers had siphoned off this bailout money in advance, years before the government had spent it.


Great stuff.

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crankynick

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