Core Problem Is Too Much Centralization ... In Both Government AND the Private Sector

Although, is banking in America even a private sector anymore?

Submitted by George Washington
Nobel prize winning economist Ed Prescott has previously said that we have to break up the big banks. Prescott notes in a new interview that centralization – of either government or banking – is a core problem:
[Question] Brussels is using this crisis to grab more powers from governments.  How does that make things even worse?  [Prescott] Dangerous centralization. China … From 1,000 to 1,300[A.D.] was the richest country, the most advanced. They had done much better than Europe, and they were by far the leader. But then – under the Ming Dynasty – they got centralized, and they started preserving the status quo. The provinces lost their power. [The Ming Dynasty got rid of the "press".]  And technological regression set in there.  People from the other end of the Euro-Asia land mass came and humbled that great empire.  [Question] Why is the U.S. economy doomed to fail and what will happen? [Prescott] They haven’t gotten rid of the too big to fail problem. They get real big … people know who led to these financial institutes, know that they will be bailed out, will expect it, and therefore the institutes can borrow at a lower rate. So they gamble… Government likes to get favors out to certain people and then big contributions …. 
  Dr. Prescott is right … Numerous studies show that big banks are less efficient than smaller banks. The New York Times notes: ... Continue reading at Zerohedge.com... image: flickr.com/teknokool

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