This is not exactly a positive comparison but looking at the US banking system - even today, as it is treated with a double standard - it's a fair criticism. The American banksters have much too much power and authority, especially considering the fact that they are at the center of this global recession.
“In its depth and suddenness,” argues Prof Johnson, “the US economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets.” The similarity is evident: large inflows of foreign capital; torrid credit growth; excessive leverage; bubbles in asset prices, particularly property; and, finally, asset-price collapses and financial catastrophe.Keep reading because this is an important issue that is relevant to everyone. Whether the US is exactly like Russia or only has some of the negative aspects is up for debate. It also cuts to the heart of the argument that Ariann Huffington makes about the Republicans possibly capitalizing on the populist anger around the country. The Democrats are dangerously close to crossing the line (if they have not already crossed) and losing the public. Even though it's in everyone's best interest to keep the banking system functional, it's hard to support the forgive and forget policies that continue even today.
“But,” adds Prof Johnson, “there’s a deeper and more disturbing similarity: elite business interests – financiers, in the case of the US – played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse.” Moreover, “the great wealth that the financial sector created and concentrated gave bankers enormous political weight.”
The banking report on solvency is due out next week and there will be some seriously confused people if the report gives a thumbs up for all of the major banks. There is still too much garbage out there and nobody really trusts the banks. Unfortunately there remains little trust in the Geithner approach as well.
