America (and Europe) by discriminating small businesses and entrepreneurs is becoming the “Home of the risk avoiders”

Sir, in “The US state will expand no matter the election result”, August 20, Lawrence Summers displays a serious lack of understanding of current bank regulations. 

Summers writes “the complexity and hence the cost of everything [like] regulating banks rises faster than overall inflation… imply… that government spending as a share of the economy has to rise”. 

Absolutely not! It is not the cost of bank regulations that is expanding the role of the state, but the regulations itself. Capital requirements for banks based on perceived risks create an extremely preferential access to bank credit for those officially perceived as not-risky, and that can only expand the role of the most prominent officially not-risky, namely the “infallible” sovereign. 

In the “Home of the bBrave” small businesses and entrepreneurs are being discriminated against. Not only is this expanding the US state, but more worrying it is changing its nature… the “home of the risk avoiders”.