Paul Krugman notes the president's optimism but admits he wonders "how many senators believe that they can get away with claiming that war is peace, slavery is freedom, and regulating big banks is doing those big banks a favor."
Once upon a time we had a pretty decent system for regulating the financial system. The banks had little to complain about and their customers had a lot to feel confident about. But then movement conservatives won the presidency.
From 1980 or so onward, however, that system gradually broke down, partly because of bank deregulation, but mainly because of the rise of “shadow banking”: institutions and practices — like financing long-term investments with overnight borrowing — that recreated the risks of old-fashioned banking but weren’t covered either by guarantees or by regulation. The result, by 2007, was a financial system as vulnerable to severe crisis as the system of 1930. And the crisis came.
Do we need to continue shouting this? That the Republicans -- and Ronald Reagan -- deliberately dismantled a workable system and left us with mess? And that they were the first to spend billions on a bail-out?
... You should bear in mind that the biggest bailouts took place under a conservative Republican administration, which claimed to believe deeply in free markets. There’s every reason to believe that this will be the rule from now on: when push comes to shove, no matter who is in power, the financial sector will be bailed out. In effect, debts of shadow banks, like deposits at conventional banks, now have a government guarantee.
It's official. Contemporary conservatives do not believe in the free market any more than a butcher with his thumb on the scale believes he's selling you those rib-eyes at the advertised price. Of course, the butcher isn't about to tell you what he's doing -- not the way John Boehner does.
Recently Mr. Boehner gave a talk to bankers in which he encouraged them to balk efforts by Congress to impose stricter regulation. “Don’t let those little punk staffers take advantage of you, and stand up for yourselves,” he urged — where by “taking advantage” he meant imposing some conditions on the industry in return for government backing.
Thanks a bunch, Boehner! We get it. More and more punks Americans get it!
... It’s the punks versus the plutocrats — those who want to rein in runaway banks, and bankers who want the freedom to put the economy at risk, freedom enhanced by the knowledge that taxpayers will bail them out in a crisis.
