Actually, there is a simple solution. Stop pumping money into private banks. Instead, use the funds to set up 20 or 30 regional banks owned directly by the American people (1 share per citizen, no more, no less) with simple rules that mandate moderate, responsible lending. That, plus direct government stimulus spending on a larger scale, should do the trick. And let the mega-private banks that caused these problems and are now in trouble die off.
During the 30s, the federal reserve was engaging in very tight fisted policies. This is something which Paul Krugman has talked about quite a bit, "Golden Fetters", etc. If you are going to make the claim that he has stated that the Fed was going for low interest rates in the 30's, I would like to request you link to the articles in which he said such things.
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did the banks eat our cookies?
Actually, there is a simple solution. Stop pumping money into private banks. Instead, use the funds to set up 20 or 30 regional banks owned directly by the American people (1 share per citizen, no more, no less) with simple rules that mandate moderate, responsible lending. That, plus direct government stimulus spending on a larger scale, should do the trick. And let the mega-private banks that caused these problems and are now in trouble die off.
30s was no liquidity trap...
During the 30s, the federal reserve was engaging in very tight fisted policies. This is something which Paul Krugman has talked about quite a bit, "Golden Fetters", etc. If you are going to make the claim that he has stated that the Fed was going for low interest rates in the 30's, I would like to request you link to the articles in which he said such things.