Eerily peculiar recommendations

Sir Lawrence Summers writes about “Steps that can safeguard America’s economy” March 31, and suggests “that a top priority for financial policy has to be increases in the level of capital held by financial institutions” and “have Congress insist that [the government sponsored enterprises] stop paying dividends and raise capital substantially as they expand their lending”.

Given that we heard so many times during the last years about how well the financial institutions were capitalized; and that the lack of capital had nothing to do with how this crisis came about, since even the over leveraging of financial institutions had more to do with the lack of common sense, these recommendations sound eerily peculiar indeed.

Why not suggest they stop digging in the hole they’re in first?