September 30, 2008
Posted by Jeff Lipshaw
If you want some sane commentary these days, try reading David Brooks in the New York Times. His column yesterday on the defeat of the bail-out bill was entitled "Revolt of the Nihilists." Here's a taste:
We’re living in an age when a vast excess of capital sloshes around the world fueling cycles of bubble and bust. When the capital floods into a sector or economy, it washes away sober business practices, and habits of discipline and self-denial. Then the money managers panic and it sloshes out, punishing the just and unjust alike.
What we need in this situation is authority. Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up.
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And yet Republicans (and even some Democrats), populists, libertarians, and other yahoos believe that government is the problem and thus have no faith whatsoever in the "powerful hand of public institutions" (the exception being those institutions dedicated to policing and 'military defense'). Regulatory agencies have been toothless for some time now (and not just in the financial sector, as the Department of Health and Human Services and the FDA in particular makes clear) and the ideological legitimation of of their evisceration goes back to the Reagan years and remains close to the heart (or what stands for same in this case) of most Republicans.
Posted by: Patrick S. O'Donnell | Sep 30, 2008 2:39:13 PM
Brooks's notion is very romantic and out of touch. Which public institutions have the "steady and powerful hands" to guard aginst this? Both Republican and Democrat Presidents hire their Treasury Secretaries from Goldman Sachs. A recent and long-tenured Chairman of the Federal Reserve was a consultant to the fraudulent Lincoln Savings & Loan before taking office. And the US Senate has decided to allow the SEC to suspend the application of mark-to-market rules under FASB Statement 157 (itself an example of the SEC's delegation of authority to the private sector), thereby opening up the door to future mischief. Who's left? Brooks faults House Republicans for living in 1984, but if his rhetoric is sincere, he's living at least a decade earlier.
Posted by: A.J. Sutter | Oct 3, 2008 8:48:39 AM