- Thu Mar 14, 2019 9:23 pm
#114358
Rep. Alexandria Ocasio-Cortez, D-N.Y., exposed her economic ignorance again this week when she argued that bankers should be liable for borrowers' mistakes.WOW, she is one stupid horse faced cow.
During Capitol Hill testimony from Wells Fargo CEO Timothy Sloan, Ocasio-Cortez contended that if in the event of an oil spill on the Dakota Access Pipeline, which Wells Fargo helped finance, the bank should be held responsible.
"If there was a leak from the Dakota Access Pipeline," Ocasio-Cortez asked rhetorically, "why shouldn’t Wells Fargo pay for the cleanup of it, since it paid for the construction of the pipeline itself?”
"Because we don't operate the project," Sloan responded. "We provide financing to the company that’s operating the pipeline.”
Ocasio-Cortez overlooks the reality that banks already have built-in liability for their debtors' mistakes. It's called the free market. If a business makes poor decisions and goes bankrupt, the loan will not be repaid and the bank will lose its investment. Ocasio-Cortez’s point betrays a total naïveté about how financing works. Her contention is akin to claiming that a bank holding a car loan should be responsible if the owner gets into a crash. It's like saying a bank holding a home mortgage should pay to fix the pipes when they burst.
- By johnforbes