My first thought upon reading this was the well-worn phrase: The lunatics are running the asylum.
From Reuters: “Analysis: America to Europe: Stronger banking union would help boost growth.”
The United States has a message for Europe: If you want to help your ailing economy, consider pledging taxpayer money from across the euro zone to help troubled banks.
Washington dispatched Treasury Secretary Jack Lew this week to Paris, Berlin and Lisbon in part to convey concerns about the euro zone’s need to revitalize banks crippled by a debt crisis.
The issue has jumped up the United States’ worry list, overshadowing a previous spat with Berlin about criticism of Germany’s export-driven economic model.
Speaking in Paris on Tuesday, Lew urged Europeans to go beyond the deal struck last month to create shared institutions for winding down failed banks.
Washington “would like to see more action taken” to create common backstops for banks and to insure they have enough capital to make enough loans to create jobs, he said.
“The more capital that there is in European banks, and the stronger the backstops are, the better it is for the European economy, the U.S. economy and the world economy,” he said.
The more I pondered, however, it struck me that what Treasury Secretary Jack Lew is proposing is not crazy, it’s evil. (Please note that I am calling the idea “evil,” not Mr. Lew. Thank you for noticing.)
How would you like to visit Las Vegas, put your life savings on black, at the roulette table, knowing if you win you’re rich, and if you lose, the House is going to steal money from everyone else in the casino (and in the city outside) to bail you out? Would such an arrangement change your betting behavior?
This is what Jack Lew is saying should be done by Europe for its irresponsible banks. Of course, he’d never propose or support the same kind of theft here, right?