Bank Reform: The Perfect Storm

Arianna Huffington recently detailed the bizarre world in which we now live where the foremost economic watchdogs on both the left and the right are calling President Obama's banking reforms a failure. Says Huffington:

Yesterday's opinion section of the Wall Street Journal offered convincing proof that those who want a progressive financial policy and those who simply want to save capitalism are in agreement about the madness of the administration's Wall Street policies.

There, on the editorial page of the capitalist Bible, was a piece taking repeated shots at Wall Street darling Goldman Sachs. And, over on the opposite page, a two-fisted op-ed by former hedge-fund manager Andy Kessler in which he labels the government bailout of Wall Street "a dumb move" and "a bust."

I'm planning to shrink down today's Journal, laminate it, and hand it out anytime someone in the media starts analyzing the economy using the cobweb-covered, tried-and-untrue right vs. left framing.

You know that this way of looking at financial policy is dead and buried when Rupert Murdoch's pride and joy is publishing takes that I could happily have written myself.

...

There is much in the Wall Street Journal that I don't agree with but, when it comes to the failure of the administration to address and fundamentally reform what Kessler calls "the structural problems that got us into trouble in the first place," we are of the same mind. There is no daylight between a progressive position focused on the paramount need to get the real economy going and one based purely on what makes free markets work.

The editorial goes so far as to suggest imposing a tax (yes, the Wall Street Journal is proposing a tax!), an FDIC-style bailout tax to be precise, "for those in the too-big-to-fail camp."

We've reached the point where the only people defending the administration's Wall Street policies are the people benefiting from them -- or their good friends, Tim Geithner and Larry Summers.

It is the final point that I've placed in bold above that is critical. Only the administration and those on the take -- so to speak -- are able to defend what has happened in the wake of our financial meltdown. Moreover, even those who may have first lacked the vision to see it are having their eyes opened to the fact that we have done little or nothing to right our ship, nor prevent it from sinking anew.

18 July 2009