Phil Gramm, Hero of Deregulation

A nice piece by Lisa Lerer in Politico makes the point that Phil Gramm, on whom John McCain says he'll be relying for economic policy advice, was one of the key architects of a piece of deregulation that's been a big contributor to the current crisis in the financial markets. Indeed, Gramm was, in general, one of the most hard-core far-right voices on economic policy all during his tenure in the congress. McCain, who neither knows nor cares about economic policy, decided during the primaries that he should tack to the far right by outsourcing his thinking to the Gramms of the world and based on the evidence thus far from his reaction to the crisis (roughly speaking: let them eat cake) he hasn't reconsidered that idea.

After all, to reconsider it he'd need to care about the issue, have some inclination to think about policy questions, and believe that public policy should benefit ordinary people and none of those things are true.

Comments

"After all, to reconsider it he'd need to care about the issue"

Kinda like how trust-fund Matthew would have to care about economics in order to oppose Obama for the nomination.

But Matthew's set for life due to the circumstances of his birth, so he's got no problem telling the Democratic electorate that they're racist when they vote for universal healthcare.

Posted by Petey | March 29, 2008 12:30 PM

Petey: Just my view, but I'm sure you'll disagree. I think it's plausible that if Obama is nominated and elected (just say if), if people such as yourself help lead a grassroots drive which gets Congress to come up with a plan in the Edwards style (at least), and does so strongly, I don't think Obama would fight it -- and may even back it, even given Goolsbee & co.

PS: I am no trust fund kid and do not see anyone as racist for supporting Hillary for their beliefs that she will back the policies that she now (post-Edwards) campaigns on.

(I happen to disagree, and think that those policies would largely be abandoned by her once in office, particularly when they in any way endangered other agendas in a weak majority Congress, and think this is partially indicated by her initial attempt to concentrate U.S. health care into the hands of, and under a plan designed by, the then 5-largest insurers and HMO's.)

Posted by El Cid | March 29, 2008 12:54 PM

(roughly speaking: let them eat cake)

Hillary Clinton has passed the Marie Antoinette-in-Chief test! John McCain has passed the Marie Antoinette-in-Chief test! How in hell is Obama qualified to be Marie Antoinette-in-Chief?

so he's got no problem telling the Democratic electorate that they're racist when they vote for universal healthcare.

The world was off-axis there for awhile, but it looks like things are settling down to normal again: it's safe to go back to hating Petey!

max
['How's that Surge workin' out there, Petester?']

Posted by max | March 29, 2008 12:59 PM

. . . Phil Gramm, on whom John McCain says he'll be relying for economic policy advice, was one of the key architects of a piece of deregulation that's been a big contributor to the current crisis in the financial markets.

And what would that "piece of deregulation" be, pray tell? Gramm-Leach-Bliley, perhaps?

So, smart guys. What would be different about today's "current crisis"* if G-L-B had never been enacted?

* A contentless phrase regularly employed by uninformed writers to avoid having their uninformed readers become aware of the former's abysmal ignorance of the issues under discussion.

Posted by Ellen1910 | March 29, 2008 1:03 PM

I think the economic left would be making a big mistake to back either of Clinton or Obama - neither has the history or the credentials to deserve our unwavering support. The superiority of Clinton's health care plan and housing bailout, to me, is balanced by her stronger connection to "free trade" blather and her continuing ensconcement in corporate money.

I think the big split in the economic left and center-left over Obama and Clinton is pretty good evidence that the choice is deeply non-obvious for those of us who weight economic leftism seriously.

I consider the differences on foreign policy to outweigh the differences on economic policy. If I was as confident as Petey in Hillary's devotion to and plan for passing universal health care, I might have a different take, but I see way too much corporate influence on her side to take her plagiarism of Edwards without a mountain of salt. (Likewise with Obama's new ads in Indiana and Pennsylvania, where he's stolen Edwards' wardrobe as well as his rhetoric.)

Posted by DivGuy | March 29, 2008 1:03 PM

God damn President Obama for signing Gramm-Leach-Bliley! A more experienced administration would never have let that happen.

Posted by I Approve This Message | March 29, 2008 1:11 PM

Just so it's clear ---

Gramm is a died-in-the-wool Texas Republican who wants to cancel all New Deal legislation, establish a pre-Lochner Supreme Court, and return us to the days of McKinley. His distaste for any and all forms of regulation and his views on the proper role of government are well known and don't require an historical analysis.

McCain has cast his lot with the Radical Right and no amount of sympathetic musings on his part will change that.

Posted by Ellen1910 | March 29, 2008 1:16 PM

This must be thing number infinity that is just beyond Matt's grasp. Why were so many people given loans they couldn't possibly afford? Because the left - during the 90's - called it "unfair" that poor people couldn't get loans. Afraid of being tarred as discriminatory by the usual left suspects, banks started offering loans that were just stupid.

Now, the chickens have come home to roost, and the left is unable or unwilling to accept the simple reality that they contributed to the mess by advocating for more "open" loans.

Posted by James Robertson | March 29, 2008 1:22 PM

James Robertson is right. The left is clearly unwilling to blame the people who are clearly viewed as responsible by the right wing: the poor (and implicitly the colored folk) and the danged liberals that love 'em.

That's why the CEO of JP Morgan was just interviewed by the New York Times after their taxpayer-subsidized acquisition of Bear-Stearns and complaining that regulations didn't keep up with their environment given the tricky financial mechanisms that they, not poor (and colored and overly liberal) people came up with, and that that is what frightened him.

Typical. The communist head of that leftist non-profit JP Morgan fails once again to blame the liberals and the poor for forcing these problems upon his industry.

(Gramm, by the way, is now a died-in-the wool Texas Republican, but the dye was necessary since he was one of those right wing Southern Democrats who fled to the Republican Party in 1983 when he was caught ratting out his fellow Democrats' budget strategy to his beloved Reaganite friends.)

Posted by El Cid | March 29, 2008 1:41 PM

An objective review of the regulations and government policies that led to the mortgage bubble and burst would include a discussion of those policies that encouraged lenders to give low- and no-money-down mortgages to marginal and unqualified borrowers. Don't hold your breath waiting for such an objective discussion on this blog.

Posted by Fred | March 29, 2008 1:48 PM

Petey:
Why do you say MY has to reconsider backing Obama? Is Hillary really any better? What's the proof that's she'd be any better? They are both centrists.

Posted by Joe Klein's conscience | March 29, 2008 1:49 PM

his reaction to the crisis (roughly speaking: let them eat cake)

I'm guessing "cake" was not the word McCain actually used.

Posted by Glenn | March 29, 2008 1:59 PM

Notice I said "contributed to". The other part of this was the selling of loans no one was examining as securities. That kept going like a game of musical chairs, until someone finally noticed that there might be a problem - and the bottom fell out.

Personally, I'm in favor of letting many of those banks fail, as a way of having the people who made those bad calls learn a lesson the hard way. Instead, the people who shouldn't have gotten the loans in the first place will get nothing, and the people who should have known better will get bailed out.

Posted by James Robertson | March 29, 2008 2:30 PM

I remember liberals / 'the left' being against red-lining of minority communities, but that's utterly different than encouraging deceitful or risky loans.

So far the reverse seems true -- people who otherwise wouldn't have gotten loans were lured into the impossible by those who sought short term deals and profits and momentarily felt insulated from the risks. I realize that libertarian marketeers and other market fundamentalists are opposed to regulations on businesses like check cashing stores which charge massive fees and percentages to cash checks to the currently unbankable, but I don't.

Caveat emptor, I guess, but you might at least argue that housing, like health care, is a bit more societally important consumer good than others.

That's perhaps why providing housing access to those who couldn't outright buy houses or qualify for regular loans was a key aim of the New Deal and the post-WWII military benefits package.

Sure, the government could have put in place dangerous and stupid policies which freely allowed lenders to screw over the industry as well as all those millions and millions of new homeowners who formed the basis of the U.S.' postwar economy [American blacks were mostly excluded by segregation and thus missed out on these $trillions in wealth securing], but for some reason, the government at those times chose not to allow market fundamentalism to have its sway.

http://afp.google.com/article/ALeqM5h2767nPZrI2i5c3Ol9hKbmi8FvMA

Posted by El Cid | March 29, 2008 2:52 PM

The myth that doing away with red-lining is the cause of the crisis isn't insane: it's deliberately nasty crap. Nobody rational loans money they expect to see back without checking the bona fides of the borrower. Lenders just decided to industrialize the whole process and trimmed back on expenses, like thorough credit checks.

There's nothing in anti-redlining that had spit to do with lenders not making sure their borrowers could repay.

Posted by Jeffrey Davis | March 29, 2008 3:01 PM

Jeffery Davis,

"Nobody rational loans money they expect to see back without checking the bona fides of the borrower."

This is true of the traditional banking model, of loaning money and holding those loans to maturity. Government pressure to loan to borrowers with low incomes and poor credit led many traditional banks to cede this market to stand-alone mortgage companies. These mortgage companies -- since they got paid as soon as they sold their loans to the securitization market -- didn't have to worry about the loans being paid back.

There is plenty of blame to go around here, from dishonest and greedy mortgage borrowers who colluded with dishonest and greedy mortgage brokers, to credit rating agencies that gave AAA-ratings to securities without fully understanding the quality of their underlying mortgages, to institutional investors who relied too much on these ratings instead of their own due diligence, to the Greenspan Fed that kept the Fed Funds rate at 1% for too long in the wake of the dot-com bust, etc. But before liberals jump to the reflexive response that the solution is more well-meaning government regulation they should examine the unintended consequences of previous government regulations and policies, and proceed cautiously. There's no need to rush to solve problems that don't exist right now: the securitization market has frozen, putting most of the stand-alone mortgage companies out of business; no one is offering "NINJA" loans to unqualified borrowers; etc.

BTW, one well-meaning government policy that facilitated this mess was limiting the number of nationally-recognized statistical rating organizations (NRSROs), which created an oligopoly of rating agencies asleep at the switch. The feds have recently allowed some competition into this business, for the first time in memory, by granting the NRSRO designation to Egan-Jones Ratings.

Posted by Fred | March 29, 2008 4:27 PM

Petey,

"But Matthew's set for life due to the circumstances of his birth, so he's got no problem telling the Democratic electorate that they're racist when they vote for universal healthcare."

As fun as it is to see Democrats accuse each other of racism, it's not fair to claim that Matt's wealth affects his political views. There are rich folks on all sides of the political spectrum, including supporters of your man John Edwards at Fortress Investments. They didn't give him a few hundred thousand dollars for part time work because they needed the expertise of a southern trial lawyer.

Also there are plenty of folks who don't have trust funds (yours truly included) who think that further nationalization of health care in this country would be a bad idea, because it would stifle innovation, lead to rationing and worse health care for most of us, and threaten successful American industries that create plenty of high-paying jobs. It is true though that even if Dems succeed in establishing universal health care, even if that leads to worse health care for most Americans, the truly wealthy will still have access to better care outside of the system.

Posted by Fred | March 29, 2008 4:38 PM

...Government pressure to loan to borrowers with low incomes and poor credit led many traditional banks to cede this market to stand-alone mortgage companies.

Say, have any of the troubled companies complained that they faced this government pressures to loan to the poor and minority communities, and that's how they got into this mess? Or by "government pressure" should we read "lack of discouragement" -- i.e., please stop me before I risky lend again?

Because it's one thing for their market fundamentalist defenders to say such, but I'd like to hear the industry blame these subprime- and equity-related problems on over-zealous liberal government pressure to lend to the poor. So far I haven't heard it.

Posted by El Cid | March 29, 2008 4:54 PM

Yes, the champions of "small government" at all costs and in every context have a long standing record. And we're still paying the price. We'll be hearing more of it once the D nomination is decided.
http://www.acropolisreview.com/2008/02/graphic-video-beef-small-government-in.html

Posted by Michelle | March 29, 2008 5:12 PM

El Cid,

Government involvement versus "market fundamentalism" is a false dichotomy here, because it was government involvement that created the secondary market for mortgages in the first place, and the government has long been hip-deep in the industry. Plenty of market participants profited, directly or indirectly, from government policies designed to encourage the extension of credit to marginal borrowers, including dishonest mortgage borrowers, mortgage brokers who wrote sub-prime mortgages, investment banks that packaged them into complex securities, and rating agencies that were paid to give those securities their stamp of approval. The same policies that contributed to the current bust contributed to the boom that proceeded it; why would you expect those who profited from the boom to complain about the policies that fueled it?

Posted by Fred | March 29, 2008 5:26 PM

"Yes, the champions of "small government" at all costs and in every context..."

A straw man. "Small government" hasn't applied to the mortgage industry since 1938, at least, when FDR created Fannie Mae.

Posted by Fred | March 29, 2008 5:32 PM

Matt, I feel you'd do your arguments more good if you didn't throw around terms like "far-right" so much. Gramm is pretty serious about cutting the size and footprint of government but calling him "far right" is like calling Obama "far left" -- it moves you dangerously from thoughtful, interesting analyst to polemicist.

Posted by william | March 29, 2008 5:45 PM

"Gramm is pretty serious about cutting the size and footprint of government . . ."

God, where to start? Are we talking about the Phil Gramm who fought like a wounded weasel for almost a decade to preserve boondoggles like the $6 billion supercolliding superconductor (because, coincidentally enough, it was being built in Texas)? Gramm waged class warfare his entire career, demanding cuts in programs like home heating assistance while showering tax breaks on the top 1%.

Also, recall that McCain endorsed Gramm for president early and vociferously in '96. They served together in the Senate for 16 years and were very good friends -- probably because the other 98 couldn't stand either of them.

Posted by AB | March 29, 2008 6:03 PM

James Robertson writes: "Why were so many people given loans they couldn't possibly afford? Because the left - during the 90's - called it "unfair" that poor people couldn't get loans. Afraid of being tarred as discriminatory by the usual left suspects, banks started offering loans that were just stupid."

This is simply untrue, and could only be written by someone with a profound ignorance of what was happening in the mortgage industry at the time.

I know conservatives tend to be stupid, but James Robertson goes beyond stupid.

The truth is that the mortgage industry gave out bad loans to people across the income spectrum because the secondary market had an insatiable need for MORE PRODUCT. Thus riskier loans were given out not just to "poor people" but to people buying investment properties and second homes. They were given out to people who were "house rich" but cash poor - people who were borrowing on equity from properties they already owned to buy more properties, etc.

It's simply ludicrous to suggest that "anti-discrimination" policies drove any significant part of the problem. Typically poor lending rates in minority/poor areas would come up during merger approvals - the purchasing banks would make promises which were seldom followed up on with much vigor.

Posted by MoeLarryAndJesus | March 29, 2008 6:06 PM

The same policies that contributed to the current bust contributed to the boom that proceeded it; why would you expect those who profited from the boom to complain about the policies that fueled it?

Posted by Fred

I am hardly surprised when businesses follow the incentives and disincentives set for them by the market and the law.

Now what you're saying is the opposite of the sentiment I noted: at first it was partly the government "pressuring" these companies to loan to the poor and benighted idiots; now it's a complex set of transactions set by the market and legal conditions partly involving government policies encouraging or not discouraging lending to marginal borrowers.

Of course, as you suggested, I would expect those interests which profit from a damaging & risky "boom" to not only not criticize those policies, but to indeed lobby for, propagandize for, and demand them -- which is exactly what they -- including Phil Gramm -- did.

This obvious (and constantly made by liberal and leftist analysts) view in no way supports the meme that the business and popular right wing is trying to push -- that the subprime mess is the result of those danged liberals "pressuring" the industry to make bad & risky & oversold loans to the undeserving and foolish-deal-accepting poor.

Similarly, I claim that for the few decades, the predominant public argument has been that New Deal-era banking and lending regulations were too ancient & outmoded to keep up with late 20th century and early 21st century needs, and that the problems we used to face were a thing of the past and was old and useless Big Government thinking from those darned statist leftists and liberals.

And so free market fundamentalist /anti-regulatory ideas have dominated the regulatory environment for the last 30 years, including not only the Reagan, Clinton, and Bush Jr. administrations (Hi Robert Rubin!) but the dozen year Republican domination of Congress 1994 - 2006, and all the recent chairs of the Federal Reserve, and of course, the punditocracy and editorial pages of the megamedia.

So either we keep up the disastrous, incompetent, maniac ideologies and campaigns of lies and hubris which brought us once again to this point and claim that, hey, there's just some tinkering around the edges needed, and, er, hey, you gotta watch them unintended consequences (the only law of consequences which the right wing ever allows to be applied to themselves, there's no such thing as a "law of entirely predictable consequences for malicious & incompetent actions")...

...Or we can make sure to stop spreading this nonsense.

The rescue of Bear Stearns marks liberalisation’s limit
By Martin Wolf
Financial Times
March 25 2008 19:06

Remember Friday March 14 2008: it was the day the dream of global free- market capitalism died. For three decades we have moved towards market-driven financial systems. By its decision to rescue Bear Stearns, the Federal Reserve, the institution responsible for monetary policy in the US, chief protagonist of free-market capitalism, declared this era over. It showed in deeds its agreement with the remark by Josef Ackermann, chief executive of Deutsche Bank, that “I no longer believe in the market’s self-healing power”. Deregulation has reached its limits.

...“Some say the world will end in fire, Some say in ice.” Harvard’s Kenneth Rogoff recently quoted Robert Frost’s words in describing the dangers of financial ruin (fire) and inflation (ice) confronting us.** These are perilous times. They are also historic times. The US is showing the limits of deregulation. Managing this unavoidable shift, without throwing away what has been gained in the past three decades, is a huge challenge. So is getting through the deleveraging ahead in anything like one piece. But we must start in the right place, by recognising that even the recent past is a foreign country...

http://tinyurl.com/2mgawd

Wolf does in fact view the past 3 decades as having represented gains by this deregulation and anti-regulatory environment ("liberalisation"), and he mourns that the Fed rescue of Bear Stearns must necessarily cause a departure from that approach.

But that this is the game which has been played for three decades now is not in question.

We can either keep trusting the people and approaches and ideologies which brought us this nonsense, or stop. I recommend we stop.

Posted by El Cid | March 29, 2008 6:21 PM

El Cid,

"Now what you're saying is the opposite of the sentiment I noted: at first it was partly the government "pressuring" these companies to loan to the poor and benighted idiots; now it's a complex set of transactions set by the market and legal conditions partly involving government policies encouraging or not discouraging lending to marginal borrowers."

This sentence of mine was pretty clear, I thought:

"Government pressure to loan to borrowers with low incomes and poor credit led many traditional banks to cede this market to stand-alone mortgage companies."

But since it seems necessary to parse it for you, I will. First, the government pressured traditional banks to extend credit to marginal borrowers, particularly in minority areas. Second, traditional banks started ceding this market to stand-alone mortgage companies. The stand-alone mortgage companies didn't care as much about the borrowers' credit because they were selling the loans to the securitization market instead of holding them.

More generally, you seem to crave a Manichean simplicity where there isn't one.

I read Martin Wolf's FT column when it came out. His over-arching initial point, which you have picked up and run with, that "for three decades we have moved towards market-driven financial systems" is an oversimplification. It ignores recent large scale regulatory responses such as Sarbanes-Oxley. His more specific point regarding Bear Stearns is an uncontroversial one: if the potential failure of investment banks poses a systemic risk that requires rescue from the Fed, then the Fed will demand tighter oversight in return. I don't know any "free market fundamentalists" who disagree with this.

You ought to read the column by Martin Wolf's FT colleague John Gapper, published the next day, "It is time for reflection, not regulation on banking":

We are at a moment of peril for financial markets.

I do not refer to the US and the banking industry being enmeshed in the worst crisis for 35 years. (Many people hark back to 1945, but they overlook how bad things were for financial institutions in 1973).

I mean the fact that everyone now insists that something ought to be done to stop this crisis recurring. They mean that more regulation is needed to prevent the Federal Reserve again having to rescue an investment bank such as Bear Stearns.

Take a deep breath, everyone. The last time that right-thinking Americans agreed on the need for more regulation as rapidly as possible, we got Section 404 of the Sarbanes-Oxley Act. Accounting firms were given a vague and onerous mandate and, the next thing anyone knew, New York was losing its financial strength to London.

So what should be done and, just as importantly, what should not?

First, proceed slowly. The damage from this crisis is done and it cannot be undone in retrospect. As Hal Scott, a Harvard finance professor, puts it: “There will be huge consequences for our economy from regulatory change and one lesson from Sarbanes-Oxley was not to rush.”

The US can start by ending the silly practice of only five (four, excluding Bear Stearns) big investment banks having all their activities overseen by a single financial regulator, and that regulator being the Securities and Exchange Commission. This is a relic of the botched repeal of Glass-Steagall, the 1933 act that separated banking and investment banking.

Instead of consolidating regulation, the US allowed nationally chartered banks to be supervised by the Federal Reserve while the SEC oversaw the broker-dealer arms of investment banks. The latter’s holding companies, which used their newfound freedom to form lending units (in Utah – don’t ask), remained unregulated.

When the European Union insisted on conglomerates having a single overall supervisor from 2004, Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns were shoved under the SEC. The days of this regulatory mish-mash are numbered. Either an entirely new regulator will be created or the Fed will be given oversight.

Giving overall responsibility to the Fed, while allowing the SEC to carry on regulating broker-dealer operations, would be simpler than setting up a new institution. The UK government opted for the grand approach when it removed supervision from the Bank of England and created the Financial Services Authority in 2001.

That looked good, but the collapse of Northern Rock exposed the dangers of removing banking supervision from the central bank. The Financial Services Authority’s report on Wednesday into how it handled the Rock does not make comforting reading.

The Fed should keep a keener eye on capital and solvency at investment banks, as Hank Paulson, the Treasury secretary, said on Wednesday. But that will not eliminate all problems. As Christopher Cox, the SEC’s chairman, noted plaintively last week, Bear’s capital and liquidity ratios met Fed and international standards.

What politicians should not do is rewrite banking and securities regulation to reinstate Glass-Steagall or to attempt to stop investment banks using securitisation, derivatives or investment vehicles – the things that, piled on top of each other, have caused mass disarray.

Financial technology cannot be put back in a box any more than information technology. This is the culmination of 30 years of innovation starting with the Black-Scholes option pricing model in 1973 but the notion that we can return to 1972, with credit held on bank balance sheets and investment banks just flogging securities on commission, is otiose.

All that would happen if Congress tried that would be a giant version of Sarbanes-Oxley. The global investment banking industry, which is dominated by US institutions, would be driven offshore to London or Zurich. It would find some jurisdiction where it could continue to operate in peace.

Instead of lots of new regulations, we need better incentives. Banks made too many subprime and junk loans and over-leveraged the financial system, because they did not believe they would suffer if the borrowers defaulted (although, as it turns out, they were wrong about that).

In future, they need to have reasons to fear losses as much as they covet profits. Here are two suggestions for ways to alter incentives:

First, regulators could insist on banks keeping a slice of the risk in any debt securities they sell from mortgage-backed bonds to leveraged loans. Insurers who sell catastrophe bonds to offset risk retain a slice of the exposure to stop them paying out insurance claims heedlessly when others are picking up the bill.

Second, investment banks could have a version of the Federal Deposit Insurance Corporation, which collects premiums from US banks to cover the cost of bail-outs. The FDIC premiums are set according to the riskiness of the individual institutions – banks with strong capital and low-risk operations pay less into the pool than those that are less stable.

Why not make investment banks pay a risk-related premium so that, in any future case of a Bear-style bail-out, the industry collectively foots the bill rather than the taxpayer? That would not only be preferable in terms of public interest, but would give individual investment banks incentives to operate cautiously.

There is no question that regulatory reform is needed after the shock of Bear Stearns. But a vast new regulatory infrastructure and set of rules is not the solution. A simpler structure and improved incentives would do the job better.

Posted by Fred | March 29, 2008 8:18 PM

Phil Gramm, particularly during his senate years, was always sort of a bellwether for me. Whatever he supported you could depend on being 100% against and whatever he opposed was worth your complete support.

Nice to see he's hitched his wagon to McCain's campaign.

Posted by leo | March 29, 2008 10:35 PM

That great "friend of deregulation" was a sworn enemy of credit unions, and vehemently opposed removing discriminatory regulations (like serving only a "natural community") on them that were far more restrictive than those on capitalist banks. What those phony "free market" types really mean by "laissez-faire" is the state should only intervene in the market when big business is threatened by competition.

Posted by Kevin Carson | March 29, 2008 11:41 PM

Jeffery Davis,

"Nobody rational loans money they expect to see back without checking the bona fides of the borrower."

This is true of the traditional banking model [...]

And the examples of abuses you gave had nothing to do with my point that anti-redlining pressures had nothing to do with the current crisis. Blacks were red-lined because of race. People too poor to pay or who were bad credit risks should be turned down because of their inability to pay or the high risk associated with their personal histories. Abandoning an irrelevant criterion isn't the same thing as throwing caution to the wind.

(Would you say that the 2nd amendment caused a gun murder? If you would, I'd like that in an affidavit, thankyouverymuch.)

Posted by Jeffrey Davis | March 30, 2008 10:00 AM

F*** the whole g**-d*** useless, inhuman lot of you right wing f***s with your market fundamentalist bullsh*t.

Now the Bushtards are, in fact, going to use the current crisis to push for even more radical anti-regulationism. Hello, Naomi Klein!

In Treasury Plan, a Reluctant Eye Over Wall Street

By NELSON D. SCHWARTZ and FLOYD NORRIS, March 30, 2008, The New York Times

The Bush administration is proposing the broadest overhaul of Wall Street regulation since the Great Depression. But the plan, to be unveiled on Monday, has its genesis in a yearlong effort to limit Washington’s role in the market...

...The regulatory umbrella created in the 1930s would grow wider, with power concentrated in fewer agencies. But that authority would be limited, doing virtually nothing to regulate the many new financial products whose unwise use has been a culprit in the current financial crisis.

The plan hands vast new authority to the Federal Reserve, essentially formalizing what has been an improvised process over the last three weeks. But some fear that the central bank’s role in creating the current mess will undercut its ability to clean it up.

All the checks and balances in the plan reflect the mindset of its architect, Treasury Secretary Henry M. Paulson Jr., who came to Washington after a long career on Wall Street. He has worried that any effort to substantially tighten regulation could hamper the ability of American markets to compete with foreign rivals, though he has intervened in the mortgage crisis to try to persuade banks to offer concessions to some troubled borrowers...

...“The Fed oversaw this meltdown,” said Michael Greenberger, a law professor at the University of Maryland who was a senior official of the Commodity Futures Trading Commission during the Clinton administration. “This is the equivalent of the builders of the Maginot line giving lessons on defense.”...

http://www.nytimes.com/2008/03/30/business/30regulate.html?hp

Yes, the f***ing a**holes who created our current risk of Great Depression II: The Reaganing intend to follow it up with the SURGE of de-regulation and business self control.

Great, another TruBeliever in the mold of Herbert F***ing Hoover him-f***ing-self who thought the best way out of the Depression was to let business and private charity work its magic.

And f*** all the f***ing Democrats who will f***ing walk this steaming pile of sh*t through (hello Barney Frank!) because the Great and Magical Fed might trickle down on some f***ing regular folk.

Ha ha, f*** you all, The End.

Posted by El Cid | March 30, 2008 10:21 AM