“I’M FOR PUNISHMENT” —“Summers told Taleb that he was for more capital, more l

“I’M FOR PUNISHMENT”

—“Summers told Taleb that he was for more capital, more liquidity, living wills for banks and procedures to wind them down. “What are you for?” he challenged. “I’m for punishment,” Taleb replied. Taleb outlined a system in which everyone would know which systemically important banks would be bailed out, but would presumably see strict oversight of bonuses and operations afterward. Other institutions would be left to fail, he said.”—

I’m for punishment too. Without punishment it’s not cooperation, it’s not a market, and it’s not capitalism.

I have a better punishment in mind and it’s a permanent one: if the government is going to produce liquidity (inflation) then give every citizen a debit card and distribute the money directly to consumers bypassing the banks.

That will rapidly correct the abuses of our financial sector. Because they will have to satisfy consumers to get their hands on cash.

Not that I’m in favor of government’s printing money. But if you’re going to print it, at least do it intelligently -without creating fragility, and without creating a moral hazard.