Did Barack Obama Read Our Book?

Well, probably not. But today, according to the Wall Street Journal, Obama is set to propose new restrictions on the size of the largest banks and on the activities they can engage in. (See our Baseline Scenario posts for more details.) Imposing hard limits on bank size is something that we have been arguing for and that is a central recommendation of 13 Bankers, which describes how the banks got so big and why that presents both economic and political problems.

One announcement by President Obama is, of course, only the first step in a long journey. The resistance from the banking industry and its allies in Congress will be bitter and, in the short term (the current session of Congress), probably successful. But the fact that the president is willing to take a stand–depending on how strong a position he actually takes–will help move both public opinion and the Washington establishment in the right direction.

By James Kwak

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