David Brooks Has A Fetish
David Brooks is the perfect Bush era propagandist. I don't read him, but a friend alerted me to a recent column. Brooks was upset at his own Republicans for scuttling the Paulson bailout plan. Brooks wasn't upset at them for having been dishonest and manipulative, in negotiating a compromise with the Democratic "leadership" (which the "leadership" never should have agreed to), then failing to live up to their end of the bargain. He was just upset that they scuttled the bailout plan.
What we need in this situation is authority.
Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up.
Right. Regulation is still bad. An imperial authority is good. With a steady and powerful hand. Sounds almost sexy. Maybe this authority should be dressed in black leather. Carrying whips and chains!
The Congressional plan was nobody’s darling, but it was an effort to assert some authority. It was an effort to alter the psychology of the markets. People don’t trust the banks; the bankers don’t trust each other. It was an effort to address the crisis of authority in Washington. At least it might have stabilized the situation so fundamental reforms of the world’s financial architecture could be undertaken later.
Anyone notice a theme, here? Of course, as Brooks already made clear, whatever reforms that would be later undertaken must necessarily not include too much regulation, so it's not clear what he means. Except that the bailout bill needed to be passed. But what's worse is that even after it failed, even after the market had already reacted, Brooks still wants the same bill! Now! Because whatever else happens, we must panic! Pass the "Patriot" Act without reading it. Invade Iraq for no reason. Allow spying on anyone and everyone. The key is to panic! And submit! And not think! And have that strong and powerful Big Brother making all the decisions. To make everyone feel calm, again. If not sedated...
The only thing now is to try again — to rescue the rescue. There’s no time to find a brand-new package, so the Congressional plan should go up for another vote on Thursday, this time with additions that would change its political prospects. Leaders need to add provisions that would shore up housing prices and directly help mortgage holders. Martin Feldstein and Lawrence Lindsey both have good proposals of the sort that could lead to a plausible majority coalition. Loosening deposit insurance rules would also be nice.
Got it? We need the same bill, with mere political tweaks. It's nice that he recognizes the need to directly help mortgage holders, but note that he doesn't say anything about CEO pay. Or actual oversight. Or rules to ensure that money isn't thrown at sinking companies at overinflated prices. That all smacks of the dreaded regulation! And it's not regulation we need, it's authority! Unfettered authority. With nearly a trillion dollars of our money to play with!