“A Hoover Institution report[1] by Prof Seru and a group of banking experts calculates that more than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.”
[1] https://www.gsb.stanford.edu/faculty-research/working-papers...
It is not a fallacy to assert that economic analysis from the Hooverites is about as likely to be correct as medical advice from a hobo who lives in a culvert behind the nail parlor in the strip mall.
The hobo may be right. May be.
All of the numbers might be correct, absolutely without flaw. But they're still hobos ranting about rationally acting rational actors.
Half of the fellows at Hoover are the Very Smart People who rubber stamped the Iraq War go-ahead who are now telling us that big gubmint is the problem and the sky is about to fall.
...oh, Reagan, Thatcher and Hayek are honorary fellows, and Condoleeza Rice is the director, and the Walton family make generous endowments.
I'm unsurprised. Economics becomes ever more dismal when it becomes political. And I feel a strong urge to link to the Supply Side Jesus comic, but to be fair that happens whenever Reagan and Thatcher surface.