Arnold Kling  

Up in the Valley

The Wonder of Economic Freedom... Bank Strategy: Nothing New?...

Marc Andreessen is the least depressing person I've heard in a long time. Listen to the whole thing.

He is ready to throw the whole legacy banking system under the bus, and instead go full speed with online banking. I'm not saying it's the right solution, but I think it does illustrate that the future economy is not going to be some rewind back to 2006. It is going to have new industries and new technologies. In spite of all of the efforts that government makes to bring back the housing bubble, the financial sector, the auto industry, and other sectors that the capitalist system is trying to shrink.

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COMMENTS (10 to date)
Jacob Oost writes:

You're assuming that all of these bailouts, government loans, and general monkeying around with the economy won't impede this progress.

I'm not so optimistic.

Brad Hutchings writes:

That's literally the first time I've heard Andreessen speak that he sounded coherent to me. He even channeled Schumpeter 40 minutes in. I could become a fan of his if one of those 7 inch web pads comes with a speed control.

Timothy writes:

I think it does illustrate that the future economy is not going to be some rewind back to 2006. It is going to have new industries and new

Floccina writes:

I did not find it depressing. It sounds encouraging. I think we need new leaner models; every time I go to a bank I think why is there so much overhead here. I also think to myself with dividends as low as they where in 2007 why did public companies borrow money? Rent to own agreements could replace mortgages.

As far as news papers I find you and you bloggers are far more informative that news papers. In fact the news papers (also media) have been so bad for so long I have long been looking for people on site (immigrants, soldiers, Cops, criminals, bankers, poor people, people who work in Government) to get information. I believe little that I hear in the media.

Also chronic pain verses acute pain:

On the economy I think Bush, Paulson and Obama have chosen chronic pain over acute pain. I am beginning to think that this is a mistake, maybe we should have let all the banks go we might have 25% unemployment now but the solution might be appearing by now and we might have been on the upswing already. Now the problem might be that at 20% unemployment the states go bankrupt so the politicians may be trying to maintain their own status.

rpl writes:

For those of us who can't listen to a video right now, can someone explain what he means by "online banks"? My banking is already online. My credit union has, I suppose, buildings and tellers and so forth, but I can't remember the last time I visited one. If they closed them all, I wouldn't even notice. How are "online banks" supposed to be different from the banks with online services that we already have?

Massimo writes:

Arnold, in your essay on the YouBubble, you called YouTube, MySpace, and all the big social networking sites, ponzi schemes.

If those sites are ponzi schemes, wouldn't that make Andreessen a mastermind crook?

Lauren writes:

Hi, rpl.

Toward the very end of the video (around the 50min:50sec time mark), Andreessen talks about coupling "online banking"--specifically as a totally virtual operation with no costly physical branches or offices to maintain--with a fresh start in entirely new banks, rather than trying so hard to rescue the old ones.


Floccina writes:

BTW I have heard, a while back Wal-Mart tried to start a bank with the idea of providing bank access in all their stores but the powers that be got that stopped.

Brad Hutchings writes:

The thing that makes the online banking thing interesting is what to do about all the old people. I don't know if my grandfather has ever used an ATM. I wouldn't be surprised if he hasn't. He pays for everything with cash, and he carries a fist full. His weekly visits to a live teller have to make him one of BoA's expensive customers. And I've got a very tech savvy buddy in his late 40s who prefers to take checks written to his business to a teller to deposit than use an ATM or mail to a processing facility. I'm not bagging on either of them, just saying that old habits and superstitions die hard.

I wouldn't want to be the first all-online bank to gain enough mass to be on the radar of regulators and Congress. Entrenched interests coupled with government's commitment to fairness to the technologically impotent will become stiff impediments.

Dan Weber writes:

Wal*Mart had their own debit card system that they got rid off.

It would be telling to know if they got rid of it due to pressure or because it wasn't profitable.

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