Tuesday, September 16, 2008

FIRST WE DEREGULATE--THEN WE BLAME DEREGULATION

Crisis Prompts Calls for Federal Rescue Entity
By Lori Montgomery Washington Post Staff Writer Tuesday, September 16, 2008; A06
Key Democratic lawmakers said yesterday that the government may need to create a federal entity to manage the assets of insolvent institutions, much as the Resolution Trust Corp. liquidated failed thrifts during the savings-and-loan crisis of the 1980s.
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said he sees a growing recognition among economists and even some conservative market observers that further federal intervention may be needed to stabilize markets roiled by waves of foreclosures, plummeting home prices, paralyzed credit markets and a crisis of confidence in some of Wall Street's largest players.
. . . Key Republicans, meanwhile, promised a thorough examination of how Lehman Brothers wound up in bankruptcy and Merrill disappeared in a sale to Bank of America.
That examination "should focus on excessive leveraging, the over-extension of credit, the failure of regulators to limit these risky practices, and the complete failure of rating agencies to accurately assess risk," Rep. Spencer Bachus (R-Ala.), the senior Republican on the House Financial Services Committee, said in a written statement.
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Ah, those heady days of deregulation pouring out of the Reagan administration. The thundering hoofbeats of The Masked Deregulator, armed with silver-bullets of free-market-mania and privatization.
With a hearty "Hi-ho, privatize," that masked man on his white horse galloped off with government oversight, wrecked the airlines, encouraged bubble after bubble in de-controlled financial markets, brought down the house (literally) in mortgage fraud and schemed the country into financial 'derivatives' that no one yet understands.
Not even the famed and shamed Sir Alan Greenspan (in his secondary role as Tonto) seemed to know what the kimosabe was up to...
Spencer Bachus is having second thoughts, now that his investments have tanked and the old 401-K ain't what it used to be. Fortunately for him (if not for us), while the nation's financial pants come down around our ankles, Spencer's assets are enshrined in the special health insurance, special K-Street payoffs and special retirement benefits he and his fellow co-conspirators (Democrat and Republican alike) have awarded themselves.
The congressional equivalent of let them eat cake.
If only there were cake. This willful and thoroughly manuevered train-wreck the Reagan legacy Republicans are so proud of (and handed down to us) is suddenly the fault of the willful and thoroughly maneuvered train-wreck the Reagan legacy Republicans are so proud of. Only they're not calling it that. They smashed all the apples and have the gall to call it applesauce--the cake will come later, if ever.
Reagan was the centerpiece of the two consecutive George Bush election campaigns. His image was everywhere, Nancy tottered out to grin and the old communicator's visage smiled benignly down on each scripted event. Reaganisms were as popular as hijacked Trumanisms.
Anyone wonder where Reagan has been hiding himself during the McCain campaign? He's as absent as the dethroned Milton Friedman at an economic summit.
Ah, how the large print giveth and the small print taketh away (Shoe cartoon strip).