Recognition of Bad Bridges and Failing Banks - A Quote

The following quote was taken from this interview of John Allison, former CBO of BB&T, and was linked via Samizdata.

“It is true that individual financial institutions made bad decisions. In my opinion, they should have been allowed to go out of business—that would have been the proper way for them to be handled. However, their decisions were secondary to government policy. It should be remembered that the Federal Reserve owns the monetary system in the United States; we do not have a private monetary system. In 1913, our monetary system was nationalized. If you’re having problems in the monetary system—which is where the problems in the economy began—they are, by definition, government problems. This is analogous to interstate highway bridges falling down: If interstate highway bridges were falling down, everyone would recognize that the government owns the highways and conclude that this is a government-caused problem. Well, the government owns the monetary system, and the errors by the Federal Reserve are the foundations of the financial problems we’ve experienced.”

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