Congress is weighing financial reform, but at least one leading economist says Senator Chris Dodd’s proposal will do nothing to stop the next crisis. Simon Johnson believes Washington has fallen under Wall Street’s spell over the past 20 years, and rather than propping up “too big to fail” banks, the government should force large financial institutions to size down. Which approach will have better long-term effects for the economy? And will legislators take his advice? Larry talks with Johnson about his book, 13 Bankers.
Guest:
Simon Johnson, co-author with James Kwak of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Pantheon). Professor of Entrepreneurship at MIT’s Sloan School of Management and former chief economist of the International Monetary Fund