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Edited on Tue Jul-15-08 05:46 PM by ihavenobias
By Cenk Uygur
When I was growing up as a young Republican dork, I was told that "regulation" was a bad word. Sensible people were for less government regulation. Socialists were for more government regulation because they liked big government controlling the markets and your life. And most of all they loved red tape that inhibited business.
And to this day, I still shudder when I hear the word "regulation." It sounds so nasty and socialist. That's the power of brainwashing.
Here's the only problem -- it turns out you totally and completely need regulation. Without government regulation, the excesses of the market go unchecked and we constantly have financial meltdowns. Kind of like ... now.
Of course, the right answer is balance. Too much government regulation does slow down business and get to a point where it inhibits growth. Too little regulation means there is no one to watch over the excessive risks that corporations take for short-term profit and we have economic collapses that are then dumped on the American taxpayer.
Complete deregulation is an intellectually indefensible position. It is also the current Republican platform. We have been trained, and yes even brainwashed, into believing that the government is a bad thing and the less you have of it, the better. That is until of course your house is burning down, then all of a sudden government help -- in the form of the fire department -- seems like a pretty good idea.
The reason we have government is because it serves a role that we need in society. Police, fire department, public education, common defense and financial regulation of the markets. If you don't have a check on insider trading, the rich get richer and the average guy gets screwed. So, you need the cops of Wall Street. But this isn't just the Securities and Exchange Commission. It is every regulatory agency that watches over the financial industry to protect the interests of all of us.
Even Adam Smith realized the need for government regulation. And it is a perverse situation we find ourselves in that I even have to make the case for such fundamental and obvious points. But yet, here is the campaign for one of the major party candidates for president hiring as their top economic adviser the man who embodies this bloodlust for limitless deregulation. This is probably the one person who best represents all that is wrong with radical deregulation. His name is Phil Gramm.
If you liked Enron, you'll love Phil Gramm. And you'll also love his wife, who helped to deregulate the energy industry which Enron took advantage of, before they collapsed -- and then got paid millions for it from... Enron!
The Gramm family has been deregulating America at a furious pace and getting paid handsomely in the forms of legal bribes from the likes of Enron and Swiss Bank (let alone the millions contributed to Phil Gramm's campaigns through all of the top banks throughout the decades). David Corn has a must read article about this financial merry-go-round that you can look at here. Everyone gets paid and then when they run out of money, they stick us with the bill.
Unless you're a highly paid executive in the financial industry, you'd have to be crazy or ignorant to repeat the mantra of deregulation at this point in our history. We have deregulated to the bone and we now see the consequences. Bear Stearns, Enron, Fannie Mae, Freddy Mac, Indy Mac and the list threatens to grow to 150 other banks. Now is not the time for deregulation.
Democrats must insist on further regulation if they are going to agree to bailing out all these companies and institutions. No more free rides on our dime. Republicans claim to care about your taxpayer dollars and then they shovel it over to their corporate friends. There's nothing wrong with corporations. I'm a die hard capitalist. But in capitalism corporations need the help of the government in regulating a balanced playing field so no one abuses the system. That kind of regulation doesn't hurt corporations, it helps them.
You know what hurts corporations -- laissez faire economics with unlimited deregulation. Enron lobbied for deregulation -- and then it cost them their company. Phil Gramm's Swiss Bank wanted deregulation and then they lost $37 billion in the ensuing financial meltdown. Be careful what you ask for, you just might get it.
Finally, the idea of putting Phil Gramm, and his acolyte John McCain, in the Oval Office to reek destruction on our economy again is a frightening thought. Imagine the damage they could do with four more years. If you like the economic meltdown we're in the middle of, then you'll love the McCain presidency. These guys are the financial equivalent of the neocons. They are financial radicals who have taken over the system. The idea of putting them back in charge is absolutely unthinkable.
It is the job of the press to let the public know what the realities are. Enron didn't happen out of nowhere. Bear Stearns didn't go down for no reason. There were real reasons behind the downfall of these companies and the meltdown of the markets. There were real actions taken by real people that led to this disaster. One of the primary culprits was Phil Gramm. If the American people knew that, they might not be so ready to put his pupil in the Oval Office. In fact, they'd be crazy to do that. But if they don't know that because the press never told them ...
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