Monday, March 31, 2008



A prescription for an even worse economy

Saturday we looked at the fake regulatory reforms Bush is trying to throw as a sop to a concerned and angry public, a public seeing the economy spiraling into the toilet, one sign of which is the highest number of people on Food Stamps ever. I mentioned how I'd be eager to see Paul Krugman do a little slicin' and dicin' on Monday. He doesn't disappoint. Basically he's confirmed my instincts that they were just shuffling around the deck chairs. "[I]t’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive."
[I]f financial players like Bear [Stearns] are going to receive the kind of rescue previously limited to deposit-taking banks, the implication seems obvious: they should be regulated like banks, too.

The Bush administration, however, has spent the last seven years trying to do away with government oversight of the financial industry. In fact, the new plan was originally conceived of as “promoting a competitive financial services sector leading the world and supporting continued economic innovation.” That’s banker-speak for getting rid of regulations that annoy big financial operators.

To reverse course now, and seek expanded regulation, the administration would have to back down on its free-market ideology-- and it would also have to face up to the fact that it was wrong. And this administration never, ever, admits that it made a mistake.

Krugman finds all the reforms, substantively speaking, bogus and hollow. Bush had to pretend to be doing something to show he learned a lesson. The Regime is counting on the likelihood that your typical TV announcer is exactly as clueless and preoccupied as everyone else and that people won't be much attention, just notice something appears to be happening. Krugman must have been watching the same cookie recipe lady on CNN that I was watching on Saturday because he also laments the fact that "some news outlets report as fact the administration’s cover story-- the claim that lack of coordination among regulatory agencies was an important factor in our current problems. The truth is that that’s not at all what happened. The various regulators actually did quite well at acting in a coordinated fashion. Unfortunately, they coordinated in the wrong direction."

Not only did the Regime do absolutely nothing about regulating speculators-- other than cheering them on as free market avatars-- they "actively blocked state governments when they tried to protect families against predatory lending."

If Bush is Calvin Coolidge, McCain is absolutely Herbert Hoover, something Krugman hints at in the last line of his column. McCain brags about his economic ignorance, surrounds himself with Bush Regime retreads who largely authored the current crisis, and chose his old pal, Phil Gramm, one of the worst financial reactionaries in American politics, as his chief economics advisor. Ironically, it you had to point to just two people who were responsible for the subprime mortgage meltdown, one would be McCain's guy, ex-Senator Phil Gramm.

McCain's concern for financial matters, though, has to do with winning over wealthy GOP donors, many of whom have been sitting on their hands so far in this election season. He probably thinks he can lure them into his camp with promises of fulfilling the Republican Party's long-held dream of destroying Social Security. Yes, Mr. Straight Talk may be flipping and flopping all over the stage now, but he has been a huge advocate of privatizing (GOP-talk for destroying) Social Security

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At 7:54 AM, Anonymous Anonymous said...


Did you see him yesterday on this week?? With Robert Reich? I especially love RR let them eat cake response to McBush comments. And Krugman covering his eyes in response to George Will!!

These are the kinds of people and these are the types of debates that John Q Public should be seeing every night on tv. Along with real life people like my local pizza guy who told me the his daily flour costs went from $5. to $30 a day..


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