For his quick take, we checked in this morning with Peter Morici, a Professor at the Smith School of Business at the University of Maryland and former Chief Economist at the US International Trade Commission.
Dr. Morici argues that the President has it all very wrong: Hedge funds, private equity funds, and proprietary securities trading aren’t what got the banks into trouble.
Banks went bust or required taxpayer bailouts, he says, because of poorly considered
loans and the financial products created from those loans. Prohibiting securities trading by banks and limiting their size, he says, wouldn’t stop those same mistakes from being repeated.
“What happened yesterday not only closes the barn door after the horse is out, but it closes the door to the house instead of the barn,” the professor tells us. “This doesn’t do anything. It just creates a nuisance.”
clipped from www.minyanville.com
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