Apr 26, 2019
Just 25% of Americans say they have quite a lot or a great deal of confidence in big business, according to a 2018 Gallup survey. But in his newest book, Big Business, prominent economist and bestselling author Tyler Cowen suggests that Americans should have a much greater appreciation for the role of large firms, including large banks.
“The American economy in general is the best in the world at allocating new capital to rapidly growing sectors, and that’s the number-one thing you want from your banking and financial system,” says Cowen on the latest episode of the ABA Banking Journal Podcast. Cowen is a professor of economics at George Mason University, faculty director of the Mercatus Center, co-author of the Marginal Revolution blog and a Bloomberg Opinion columnist.
In this episode, Cowen talks about:
- Why American finance’s “extreme decentralization [and]fragmentation is part of our innovation.”
- Why banks are on the right side when it comes to promoting saving and investment. “The banking system is always encouraging you to bring in your money and save more and tuck it away and invest it somehow,” he says. “The banking system is essentially on the right side of this debate.”
- How America is on the verge of a “golden age of financial innovation.”
- Why big financial institutions and the global payment networks they’ve created strengthen America’s foreign policy and promote global peace.
- How financial employment produces social value for banks’ communities.
- How banks fuel economic growth in America’s heartland. “It’s an under-reported story how much growth there is in America, not just on the two coasts, but in the heartland . . . and that’s basically working,” he says.