Baltimore City Paper

The New Republic Raises the Right Questions

Read this.

In examining President Obama's pledge to (finally) take on financial services reform, and Paul Volcker's prescription for ending too-big-to-fail, Peter Boone and Simon Johnson, writing in The New Republic, take note of something that until now has mostly escaped the notice of us financial commentators: "Market Power." Consider:

But market power—that is, the ability to impose cartel pricing—is just one facet of the financial system in which we're all so literally invested:


As Boone and Johnson conclude, "the Volcker rules are not the answer." What is then?

It's hard to read the piece and conclude the answer isn't, at least, a broad-based popular movement against the financial sophistry that has long passed for innovation. Don't ask me how such a movement could come about though. I've been waiting—and calling—for it since 1988, and no sign yet.