In democracies, special interest groups have significant power. Their power is greater when the citizens are ignorant or apathetic. This article documents the ignorance/apathy of US citizens.
There is new evidence documenting the fact that when banks can sell their loans off, they make more loans of lower quality. To keep banks safe, I argue that they should be required to hold all their loans to maturity.
The Greek case shows what can happen if austerity policies are imposed too soon. What lessons from Greece apply to the US? And should a transaction tax be applied to all bank trades?
You might think the TARP bank bailout is over. It is not. There are still more than 300 that have not repaid their TARP borrowings. Most of these banks are small. Major bank reform is still needed.