John Kay

“Too big to fail” insurance is likely to leave the non-financial economy with the worst of all possible worlds – less public control of risk and greater potential calls on taxpayers.

John reviews Joseph Stiglitz’s book on the financial crisis: Freefall: Free Markets and the Sinking of the Global Economy

Tailgaters think the view that their behaviour is dumb is based on a purely theoretical analysis, which is refuted by the tailgater’s practical experience. And so the culture of self-confident, self-congratulatory tailgaters perpetuates itself.

Watch John testify at the Treasury Committee on Financial Institutions here >
More from the committee can be accessed here >

In the name of free markets, we created a monster that threatens to destroy the very free markets we extol.

Every era spawns financial follies. Every era spawns observations that, with hindsight, protagonists wish they had not made.

The most effective control is other parties’ diligence in assessing the businesses with which they deal.

John comments on bankers’ salaries and bonuses. more>

A stance which is pro-business must be distinguished from a stance which is pro-market. In the two decades since the fall of the Berlin Wall, that distinction has not been appreciated well enough.

When the next crisis hits, and it will, the frustrated public is likely to turn, not just on politicians who have been negligently lavish with public funds, or on bankers, but on the market system. What is at stake now may not just be the future of finance, but the future of capitalism.