Obama, Please Screw the Banks

Barack Obama went to New York yesterday to beg Wall Street to play nice on financial reform, and Paul Krugman really wishes he hadn't. Obama said reform would ultimately help the financial industry, but Krugman doesn't see the need to play nice with the big banks. “Reform actually should hurt the bankers,” he writes in the New York Times. “An oversized financial industry is hurting the broader economy.”

The financial industry rakes in huge profits but doesn't actually produce anything of value. Banks were supposed to be earning their keep by enhancing financial stability, distributing risk, and channeling money to productive companies, but instead they just gambled with other people's money and nearly destroyed the economy. The reforms Obama wants are nice, but we need to do more. "We need to cut finance down to size." And if bankers don't like it, so what?