Policy: Economy

Nobel laureate Eugene Fama: We should have let the banks fail in 2008

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AEI Annual Dinner 2014 from American Enterprise Institute on Vimeo. Beltway Confidential,Opinion,Timothy P. Carney,Finance and Banking,Economy

Nobel-prize winning economist Eugene Fama spoke at the annual gala of the American Enterprise Institute on Tuesday night. (I'm an AEI visiting fellow, and I was there.) There he said something not many folks say in elite circles:

I think it would have been, in the long term, very healthy to have let the banks fail. Now there would have been a lot of short-term pain associated with that. But what you would have found after that is that Too Big to Fail wouldn't be an issue any more....

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