According to the mainstream media, economics rules reality even more so than science. We’re constantly being told what is possible or impossible and why certain events happen based on commonly accepted economic theory. “The US deregulated investment and commercial banking to create new efficiencies.” or “We had to bail out the rich investment bankers and their companies because otherwise the economy as a whole would suffer.” That’s nice. But whatever happens, the average American always loses out. We lost due to deregulation and the bailout. So these efficiencies we were promised simply lead to another bubble scam whose cleanup was paid for by Joe Taxpayer. The sad part was that this was totally predictable and Wall Street got its way because the national debate never questioned their logic or their power for that matter.
So it is nice to see a piece over at The Baseline Scenario destroying the logic behind the “need for big banks”. The Baseline Scenario has been getting some media exposure from the likes of Bill Moyers. Let’s hope that when it comes to restructuring this economy again, we can at least start by sorting through all of these paradigms and using only the useful.