June 10, 2008
Goolsbee Crawls Out From Under The Bus!
Obama advisor Austan Goolsbee laid low after he was caught telling the truth to the Canadian government at an inconvenient time. (You can call it laid low, I call it Another One under the Bus!)
He is back, to call for more regulation of Investment Banking:
Austan Goolsbee, an economics professor at the University of Chicago and one of Sen. Obama's closest advisers on economic issues, said the senator believed strongly in enhanced regulation of any financial institution that has access to the Fed's discount window."If you can borrow money from the U.S. taxpayer at a moment of crisis, that is a very sacred insurance policy underwritten by the U.S. taxpayer," said Mr. Goolsbee in an interview last week with Dow Jones Newswires. "We have the right to oversee anyone who is accessing that insurance policy."...
Mr. Goolsbee said that an Obama presidency would ensure that investment banks are regulated as closely as commercial banks.
Hat-tip: N. Gregory Mankiw, who asks "Remember when the University of Chicago used to be the intellectual center of the deregulation movement? No more."
To be fair, if these firms are given access to the discount window, even I must admit a little regulation is in order. Here's hoping -- as does Mankiw -- that firms will be able to opt out of the government put and the concomitant regulation.