Never mind that this would be a major change in how stock ownership works (limited liability for a piece of the profits in the form of dividends and appreciation). Never mind that (as Thoma points out) this would almost certainly reduce the amount of capital available to banks. Never mind that the reason large banks have a competitive advantage in the first place isn’t because they are more efficient, but because they have an implicit (really explicit at this point) government guarantee.
Cowen seems to love to find a problem of market failure, claim it’s not a market failure, claim that government intervention won’t work, and propose something that will clearly work worse than the government intervention. At this point, he seems to think his goal is to carry water for the Koch brothers and the rest of the 1% (really 0.01%). Is he not embarrassed? Does he think this is a game with no real consequences?
From someone who is not intelligent these policy prescriptions would be something to counter and show their fallacy. But Cowen is not stupid. I’m sure his IQ is larger than mine. Yet his macroeconomics are terrible. It is as if he sees the macroeconomy as just one large micro market and can’t understand the basic principles of macro that I teach my students every semester. And can’t understand that economic success often comes from rent seeking just as often as it comes from successfully competing in a fair market.