Larry Doyle, writing on his blog website, Sense on Cents, asks:
"Are we on the road to recovery or have we merely papered over the problems embedded in a host of our larger institutions?"
Larry clearly has an opinion as to what the answer is. He cites the article written last spring by Kansas City Federal Reserve bank head, Thomas Koenig, Too Big Has Failed. Larry says the two underlying issues in the financial crisis have not been addressed and resubmits Hoenig's short list:
"1. Losses must be identified and realized.
2. Management must be replaced.
Until both these steps are taken, true health can not return to the system."
"Hoenig discounts the systemic risk argument put forth by government officials and believes we have chosen a path of slow recovery with an increased cost borne by the American taxpayer. The powers that be are effectively transferring the losses from the institutions to the public.
Hoenig echoes economist Allan Meltzer’s view that “capitalism without failure is like religion without sin."
Read the entire article here.