The U.S. Financial System Isn't a Democracy.

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Any reform of the us. Financial system that takes large of money away from people who alray getting those large sums is not likely to be successful, barring some radical change in the political isense. He agrees thereh's always been a temptation, and certainly since the 19 seventies in the united states, to look to the banking system as a vehicle for income redistribution,. all balance sheet. So rather than readit exactly, you thin y has gotdup a, that temptation has been large for governments, regardless of their ideological strife.

Charles Calomiris of Columbia University and Stephen Haber of Stanford University, co-authors of Fragile by Design: The Political Origins of Banking Crises and Scarce Credit, talk with EconTalk host Russ Roberts about their book. The conversation focuses on how politics and economics interact to give some countries such as Canada a remarkably stable financial system while others such as the United States have a much less stable system. The two authors discuss the political forces that explain the persistence of seemingly bad financial regulation. The conversation includes a discussion of the financial crisis of 2008.