“The problem was not that banks had been too free but that they had grown too dependent on government.”
That’s the latest message from Prager University in a video discussing the question: should governments bail out banks?
It’s a very interesting video that everyone should pass around, particularly to those who think the financial meltdown occurred because of deregulation and free markets. It was in fact that governments relied too much on the government for so many years.
The host, Economist Nicole Gelinas, a fellow at the Manhattan Institute, also alluded to the Reagan bailouts of 1984 to avoid global bondholders from taking their money out of United States financial institutions.
What’s interesting about the video is that the conclusion is always the same: the banks always assume the government will bail them out.
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