It seems like whenever the government or its apologists want to distract attention from government’s responsibility for the financial crisis they start talking about hedge funds. Thus Bloomberg’s headline today about Volcker’s testimony: “Volcker Says Hedge Funds Should be Allowed to Fail”
Well, when weren’t they? The only hedge fund that ever moved the U.S. government [...]
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// ]]>The drive to off Bernanke, like 99.9 percent of the stuff we hear coming out of Washington right now is just one [...]
If supporters of free markets are to grapple effectively with the fallout of the late crisis, they need to start by getting one thing clear in their heads: Modern banks, especially the big banks, are not free market institutions. They are agencies of the government.
Creating and maintaining the value of the currency is a core function of government, laid out right in the Constitution (c.f. “and regulate the Value thereof”). In a modern, credit based financial system the mechanism through which dollars are created and their value regulated is the banking system.
