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IPFS News Link • Economy - Economics USA

Google's Eric Schmidt on why bankers deserve little sympathy and Obama does

• Daily Telegraph
"I want to be clear here that the blame, to the degree that there was, is largely in the United States, not in Europe, not in Britain," Schmidt said. "And it was fundamentally because a low-interest policy created too much money. It was an easy-money policy and eventually an easy-money policy catches up with you.

"Remember what happened. Through a series of events in the mid-1990s, Congress increased the supply of credit for home mortgages, through the institutions Fannie Mae and Freddie Mac. They were essentially given too much money for political reasons.

"And then that was followed in New York by the repeal of Glass-Steagall which then allowed banks to use investment equity vehicles to create liquidity which creates very large amounts of money. So the banks are busy creating money and making a lot of money on that creation of money and the regulators were either, depending on your point of view, asleep at the wheel or did not have the tools to understand what was going on." 

1 Comments in Response to

Comment by Lola Flores
Entered on:

 I find it appalling that somebody actually has to write an article detailing why the banksters deserve little sympthy.  Certain things are blatantly obvious and do not need to be rehashed.