I am unabashed in declaring Krugman one of my favorites...
Quote:
|
Originally Posted by Paul Krugman, NYTimes
Traditional, deposit-taking banks have been regulated since the 1930s, because the experience of the Great Depression showed how bank failures can threaten the whole economy. Supposedly, however, “non-depository” institutions like Bear didn’t have to be regulated, because “market discipline” would ensure that they were run responsibly.
When push came to shove, however, the Federal Reserve didn’t dare let market discipline run its course. Instead, it rushed to Bear’s rescue, risking billions of taxpayer dollars, because it feared that the collapse of a major financial institution would endanger the financial system as a whole.
.
.
.
.
I’ve been disappointed to see 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.
For example, there was a 2003 photo-op in which officials from multiple agencies used pruning shears and chainsaws to chop up stacks of banking regulations. The occasion symbolized the shared determination of Bush appointees to suspend adult supervision just as the financial industry was starting to run wild.
|
to the full article...
My, oh my. Goodness gracious. Have I mentioned before how quickly we forget? How quick we are to indulge in myths about ourselves, our intentions, and in retrospect, our success juxtaposed with our stated goals?
And another doozie in which Krugman posits "
It’s true that past promises are no guarantee of future performance. But policy proposals offer a window into candidates’ political souls — a much better window, if you ask me, than a bunch of supposedly revealing anecdotes and out-of-context quotes."
I am not competing with Krugman for any sort of middleweight economics title I'll be the first to admit that I could never fill his intellectual jock strap (is there such a thing? oh well, bad analogy). No doubt other masters here will feel differently.
In any event he makes he points clearly and IMHO is compelling and not easily dismissed...we are also free to believe that the sky will be purple all day tomorrow...
Quote:
|
Originally Posted by Paul Krugman, NYTimes
Many news reports have pointed out that Mr. McCain more or less came out against aid for troubled homeowners: government assistance “should be based solely on preventing systemic risk,” which means that big investment banks qualify but ordinary citizens don’t.
But I was even more struck by Mr. McCain’s declaration that “our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.”
These days, even free-market enthusiasts are talking about increased regulation of securities firms now that the Fed has shown that it will rush to their rescue if they get into trouble. But Mr. McCain is selling the same old snake oil, claiming that deregulation and tax cuts cure all ills.
|
to the full article...
Finally, to sweeten the pot in the general election, Politico observes that:
Quote:
|
Originally Posted by Politico.Com
The general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today’s economic turmoil.
|
to the full article...
03-31-2008, 02:37 AM
Linear Mode
