Garage banking

Reader comment on: Romney's Attack on Garage-Based Businesses

Submitted by Harry Binswanger (United States), Oct 9, 2012 20:46

Good on ya, Ira! I had exactly the same reaction to the Romney statement.

On my own blog, I wrote

Romney said:

"Regulation is essential. You can't have a free market

without regulation. . . . You couldn't have people

opening up banks in their garages and making loans."

He doesn't mean you couldn't allow that--he means he

wouldn't allow that. Who the hell gave him that right? People

opening up banks (or computer companies) in their garages and

making loans is exactly what we need. They have to have

adequate capital, of course, if they expect to attract deposits (in

a free society, where people standardly inspect the balance

sheet of banks before becoming depositors). But if Joe the

plumber wants to make loans--of his own money or that of

anyone who voluntary deposits in his garage-based-bank, how

on earth could that be a bad thing? Especially now, when (due

to government intervention) the establishment banks won't

make loans.

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