Former Democratic governor Eliot Spitzer who was involved in a sex scandal not too long ago and resigned has turned up at Slate as a financial writer. His recent past aside for a moment its a pretty good first effort – echoing thoughts held by many Americans. One can disagree about the details, but it is provocative We need to stop using the bailouts to rebuild gigantic financial institutions
Two responses are possible: One is to accept the need for gigantic financial institutions and the impossibility of failure—and hence the reality of explicit government guarantees, such as Fannie and Freddie now have—but then to regulate the entities so heavily that they essentially become extensions of the government. To do so could risk the nimbleness we want from economic actors.
The better policy is to return to an era of vibrant competition among multiple, smaller entities—none so essential to the entire structure that it is indispensable.
The concentration of power—political as well as economic—that resided in these few institutions has made it impossible so far for this crisis to be used as an evolutionary step in confronting the true economic issues before us. But imagine if instead of merging more and more banks together, we had broken them apart and forced them to compete in a genuine manner. Or, alternatively, imagine if we had never placed ourselves in a position in which so many institutions were too big to fail. The bailouts might have been unnecessary.
It may not be too late to follow Spitzer’s advice. There will be old school Conservatives that don’t like the financial world conceptualized by Spitzer because there is such a strong anti-oligopolies element. While Spitzer warns against over regulation, a regulatory element would be necessary to structure our banks this way. Anyway back to the sex scandal – the first link is to Alternet where among other places Spitzer takes quite a beating in a few articles for his behavior; except this one that wondered why Republican David Vitter, also involved with prostitutes didn’t get as much public pressure or scrutiny as Spitzer. For what its worth I don’t approve of Spitzer’s personal behavior, but on a scale of things to be outraged about fairly small potatoes – American politicians have been up to sexual shenanigans since the days of the hoop skirt. Which brings us to the head in the sand Conservative hypocrite of the day, Stephen Bainbridge. He is upset that Spitzer should ever be allowed employment again, The Indecent Intervals at Slate
At the very least, however, good manners and respect for public decency required that the miscreant retire to the country and live out the rest of their lives as a recluse, shunned by society.
How far we have come in dumbing down our response to public figures behaving badly.
To some extent I agree, but this faux outrage from the political party that gave us George W. Bush and his sleazy business history, Dick Cheney and his sleazy business history, the bizarre Conservative minister Ted Haggard, and gave the corrupt Ted Stevens a standing ovation on the Senate floor. The examples are so numerous and obvious there are books and web sites over flowing with details about Republican miscreants that unfortunately for America, did not live out their lives in social exile. Neal Gabler wrote a recent column about the Republican party’s McCarthyism gene. Clever, but probably doesn’t go deep enough. Many, though not all Republicans are singularly incapable of seeing the reflection in the mirror. As soon as some news site publishes a negative Bush editorial a Bush defender will rush in with the tired old Bush is just a poor victim of hatful wild eyed lefties – we should all be so victimized. Bainbridge and other experts at the art of hypocrisy and dishonesty need not fear, nothing the reality based community can say will penetrate that impentrable shield of Republican denial. America gets the message – Democrats are responsible for everything Democrats do and responsible for everything Republicans do. If it wasn’t for all the shrill noise they make and the body count, its almost like Conservatives are made of puffy little clouds of hot air.
Evidence on CRA and the Subprime Crisis
Over the years, the Federal Reserve has prepared two reports for the Congress that provide information on the performance of lending to lower-income borrowers or neighborhoods–populations that are the focus of the CRA.3 These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses. Rather, the law has encouraged banks to be aware of lending opportunities in all segments of their local communities as well as to learn how to undertake such lending in a safe and sound manner.
I could ask to Jeff jacoby, Sean Hannity, Neil Cavuto, Laura Ingraham, Bill O’Reilly and others members of the Rightie disinfo squad to step up, do the honorable thing, make corrections and retractions, then hold my breath, but then I’d die.
Central Park Holiday wallpaper. A somewhat odd size, but will probably work well on small-medium monitors.