Thursday, January 20, 2011

Fox News Wins. America Loses.

Everyone seems to have seen the obvious connection between Obama's Wall Street Journal op-ed on rebalancing his approach to regulation, and the steps that Clinton took after the disastrous mid-term elections. He has been criticized for taking this step but that is not what bothers me most. Obama and his advisors must believe that he needed to take that step in order to maintain the flow of funding for his 2012 campaign from Wall Street. More importantly, they must also believe that the electorate has changed since his successful campaign for the presidency. He can get more votes by repeating the Reagan myth that government is the problem with the economy. That is, the economy will recover faster if we "get government off of the backs of business". The GOP noise machine has been selling this myth since the 80's and it seems to be working. The public has a short memory about how we got into this economic mess.

The rest of the article is about 12 specific regulatory and legal steps that should have been taken after the failure of the financial system. Its a very detailed analysis of why the banking system failed and how the government has done more to cover up the failure than it has to keep it from happening it again. It was written by an economist with a law degree and lots of experience in banking regulation. Its a long article that you may want to read quickly and keep for future reference.

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