When you cut off economic buds from fair access to bank credit you cannot but get slim pickings in the job market

Sir, I refer to James Politi’s report on US jobs “Slim pickings” July 21.

When you have bank regulations which, by means of capital requirements based on perceived risk, discriminate against fair access to bank credit of medium and small businesses, entrepreneurs and start-ups, you stop energizing the labor market, and therefore all you will get is some obese growth… and so of course there will be slim pickings… like mostly low-wage jobs increases. And the same or even worse goes for Europe.

Risk weighted capital requirements undoubtedly distorts the allocation of bank credit to the real economy. To see this problem being completely absent from the discussions at for instance the Federal Reserve, is truly sad.

Perhaps that silence has to do with no one being able to coherently explain a valid reason for those regulations… or, as John Kenneth Galbraith worded it in his “Money” 1975, “There is a reluctance in our time to attribute great consequences to human inadequacy – to what, in a semantically less cautious era, was called stupidity” [all made worse because] “men of reputation naturally see the person who has been right as a threat to their own eminence”.