Paul Krugman: Letting the Banks Walk

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Why the rush to settle? There are two principal arguments being made for letting the banks off easy.The first is the claim that resolving the mortgage mess quickly is the key to getting the housing market back on its feet.The second, ess explicitly stated,is the claim that getting tough with the banks would undermine broader prospects for recovery.Neither of these arguments makes much sense.The big drag on the economy now is the overhang of household debt, largely created by the $5.6 trillion in mortgage debt that households took on during the bubble years.Serious mortgage relief could make a dent in that problem;a $30 billion settlement from the banks,even if it proved more effective than the government� �� s modification program, would not.So when officials tell you that we must rush to settle with the banks for the sake of the economy, don� �� t believe them. We should do this right

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Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of (more...)