A cute NYT article is going around facebook (thank you Esther-Miriam Sent!) about a banker, Robert G. Wilmers, who tells the truth about banking. The piece is full of common sense wisdom.
But one line is not quite right. At one point the NYT Journalist, Joe Nocera, writes "it meant that banks were taking excessive risks that were never really envisioned when the government began insuring deposits — and became, in effect, the backstop for the banking industry." (In context it seems that Nocera is reporting Wilmers' views, but it could also be commentary by Nocera.) But as I have reported before here (citing work by David Levy and Sandra Peart, who share my fascination with Max Weber's legacy at The University of Chicago) this is not quite true. Weber's last student, Melchior Palyi (who late in life ended up being associated with cranky right wing views about the gold standard), was an early and prescient critic of the way in which desposit insure by way of reliance on rating agencies would lead to catastrophe.
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