[lit-ideas] Re: Wall Street and Capitalism
- From: "Andreas Ramos" <andreas@xxxxxxxxxxx>
- To: lit-ideas@xxxxxxxxxxxxx
- Date: Wed, 8 Oct 2008 09:34:29 -0700
A second article from the Wall Street Journal -- andreas
The GOP Peddles Economic Snake Oil
Suddenly Republicans are against market values?
By THOMAS FRANK
OK, let me get this straight: The central axiom of conservative
Republicanism is that government is inherently corrupt and can't do
anything right.
Over many years of ascendancy, conservative Republicans have filled
government agencies with conservative Republicans and proceeded to
enact the conservative Republican policy wish list -- tax cuts,
deregulation, privatization, outsourcing federal work, and so on.
And as a consequence of these policies our conservative Republican
government has bungled most of the big tasks that have fallen to it.
The rescue and recovery of the Gulf Coast was a disaster. The
reconstruction of Iraq was a disaster. The regulatory agencies became
so dumb they didn't even see the disasters they were set up to
prevent. And each disaster was attributable to the conservative
philosophy of government.
Yet now we are supposed to vote for more conservative Republicans
because we learned from the last bunch of conservative Republicans
that government just doesn't work.
That is the advice of Sarah Palin, Republican vice-presidential
nominee, in last week's debate with her Democratic counterpart,
discussing the dread prospect of universal health care: "Unless you're
pleased with the way the federal government has been running anything
lately, I don't think that it's going to be real pleasing for
Americans to consider health care being taken over by the feds."
Conservative misrule, prompted by conservative disdain for government,
proves that government cannot be trusted -- and that the only answer
is to elect another round of government-denouncing conservatives.
"Cynicism" seems too small a word for this circular kind of political
fraud. One reaches instead for images of grosser malevolence. It's
like suggesting that the best way to recover from pneumonia is to
stand in the rain for three hours. It's like arguing that the way to
solve nuclear proliferation is by handing out weapons-grade plutonium
to everyone who asks for it.
Consider also the perverse incentives that such a logic would
establish. If we validate Mrs. Palin's thoughts on federal bungling by
electing her to the high office she seeks, we are encouraging her to
bungle everything that comes her way. After all, by her thinking, such
bungling will not discredit her doctrines but rather confirm them,
demonstrate the need for more Sarah Palins down the road. We will be
asking for it, and it's not much of a stretch to predict that we will
get it.
In the three-ring circus of conservative blame-evasion, however,
that's only one act. Over in the House of Representatives, a new breed
of Republican idealists spent last week dazzling the faithful by
taking a bold stand against the Wall Street bailout. The
administration's plan was a "slippery slope to socialism," declared
their leader, Jeb Hensarling of Texas.
One might have admired their pluck but for the breathtaking
opportunism of their own counterproposal, the "Free Market Protection
Act," which is described on the Web site of the Republican Study
Committee. True, it is not a "slippery slope." It is a headlong
stampede over a precipice, a running leap out a skyscraper window.
It starts by calling for "voluntary private capital" to solve the
problem of bad mortgage-backed securities (MBS). Several sentences
later it asks for a "mandatory" fee to be levied on all MBS, good or
bad, and apparently without regard for whether it's held here or
overseas, where American law doesn't apply. I asked William Black, the
University of Missouri-Kansas City professor of economics and law whom
I quoted last week, what he thought of this scheme. He replied, "This
is significantly insane as a matter of finance -- and unconstitutional
as a matter of law. This clause would cause a world-wide financial
panic were it implemented."
Back at the study committee's Web site, I see conservatives call to
"Suspend 'Mark to Market' Accounting." Suddenly our "free-market
protection" gang has decided it's unfair to make companies value their
MBSs at . . . the market price. Somehow the all-seeing market has gone
irrational, and so companies must be allowed "to mark these assets to
their true economic value," meaning, one might say, to mark them
however they please, a practice that, to put it shortly, is what got
us into this mess in the first place.
Space prevents me from discussing the plan's provisions to temporarily
suspend capital gains taxes and repeal the Humphrey-Hawkins Full
Employment Act. But I will note that, in discussing the derring-do of
Mr. Hensarling and his hard-core colleagues, the New York Times chose
to refer to them as "populists" -- friends of the common people. As an
indicator of the confused state of our political discourse, the
signals don't flash any brighter than this.
Years ago, conservatives realized that to destroy the legitimacy of
your adversary's concepts is to destroy your adversary. Today we are
surrounded by the wreckage. Much depends on our success in rebuilding.
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