Wednesday, May 16, 2012

Not quite the point

Romney is right, of course, that "[t]he $2 billion J.P. Morgan lost means someone else gained.”  But that's not the point, if J.P. Morgan has at least implicit federal guarantees and would impose huge negative externalities on the U.S. and world economy if allowed to fail.

When you don't see a problem with markets when there are negative externalities and implicit guarantees, leaving you opposed to corrective regulation in circumstances where the likes of Paul Volcker support it, you are not really within the scope of conventional and defensible pro-market economic thinking.

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