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2010-01-22

Obama: Never again will the American taxpayer be held hostage by banks that are too big to fail


- Banks have been run as old-fashioned professional partnerships or workers’ co-operatives, in which the interests of the workers come first and outside providers of capital are treated as an afterthought.

- Those readers old enough may recall a fad among economists in the 1960s to extol the virtues of Yugoslav workers’ co-operatives

"An awful lot of people are not managing their own money"

"In old-style 19th Century capitalism, I owned my company,
I made a mistake, I bore the consequences."



The corporation is a wonderful institution. But it contains inherent drawbacks, at the core of which are conflicts of interest.

Control over the company's resources is vested in the hands of top managers who may rationally pursue their interests at the expense of all others.

Economists call this the "principal-agent" problem.




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