Good Luck, Jeremy Stein
By Arnold Kling
The Wall Street Journal blog (Justin Lahart) reports,
He advocated aggressive government audits of banks, aimed at separating solvent ones from insolvent ones. Once that was done, insolvent banks would be forced into closure or sale while solvent ones would be pushed to raise more private capital.
In Washington, we say that a gaffe is when someone tells the truth. Mr. Stein has committed a terrible gaffe (kind of like when Larry Summers said that a fiscal stimulus had to be timely, targeted, and temporary), and I’m sure he’ll be re-programmed shortly.