Deregulation for Dummies :: U4Prez, Social Networking For Politics

Maddow: There would be no outrage about AIG's bonuses if AIG hadn't needed bailing out, right? I mean sure people get mad at fat cats with high salaries when everyone else is broke. But it's the fact that this company was using our money, taxpayers money to pay those bonuses that caused the entire country to grind our teeth down their nub ends to rage at these guys.

So there would be no outrage about AIG turning taxpayer bailout dollars into executive bonuses if there hadn't been a bailout. AIG wouldn't have needed bailing out if it weren't too big to fail, too integral to all these other parts of the financial industries. AIG wouldn't have become too big to fail if they hadn't become a big hybrid complicated uber-financial everything company that made all sorts of arcane financially engineered moves that got them squirreled into every kind of financial related business that you can think of.

AIG wouldn't have become a big hybrid complicated uber-financial everything company if there hadn't been, and this is key, deregulation of Wall Street that allowed firms to get like that. And massive deregulation of Wall Street wouldn't have happened without the rise of a political movement that preached that regulation was inherntly evil and deregulation was inherently wise and virtuous and would make everyone rich and it would be free well behaved puppies for every family.

Do you want an example of how this deregulation thing worked? You can totally use this at the high school dance or a bar or whatever to try to impress someone. Somebody starts complaining about the bailout. Complaining about AIG. You tell them actually the real villain here is Gramm-Leach-Bliley. Just say it with total confidence. Watch. You will get dates.

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I must say it is hard to tell which companies should be bought. If Obama/Geithner had been in power after the Model T, they might have bailed out the horse-and-buggy companies; or perhaps even the 8-track and cassette tape manufacturers in the last 20 years. Sometimes, progress and innovation makes certain aspects of the market obsolete. It is good to learn from hindsight; but we must have some foresight as well.

I agree that Gramm Leach Biley was a terrible idea. But Clinton signed that one. And when venture capitalist banks were throwing money at dot coms, Clinton and Bush didn't give them a pass. If Barrack Obama and Geitner were running things, Pets.com would be purchased by the government at 87% capital.

Monday, March 23, 2009

Deregulation for Dummies

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