The financial events of the last seven months, and especially the past few weeks, have convinced all but a few diehards that the U.S. financial system needs major reform. Otherwise, we’ll lurch from crisis to crisis — and the crises will get bigger and bigger.So what do the Bush administration gurus propose doing?
The rescue of Bear Stearns, in particular, was a paradigm-changing event.
They cover that up by pulling out an organization chart and saying that someone (party "A") who used to report to someone else (party "B") will, after their reorganization report to someone new (Party "C".)
Please note the utter lack of any substantial action to either help individuals who are being foreclosed, plan an orderly way to assist failing financial banks who are in trouble because the took on excessive risk and it caught up on them, or apply regulations to financial banks and force greater financial reporting transparency.
But that's what both Bush and McCain prefer. The "Herbert Hoover" approach to economic troubles. Bail out the banks, allow the wealthy to scoop up distressed properties for a song and increase the concentration of wealth, and do nothing at all for the average homeowner or borrower in trouble after the system collapsed.
This "new" plan is not a reaction to the current credit crisis and impending Depression. It is part of the deregulation of financial institutions that the Bush administration has spent 7 years trying to force through, and now that there is a disaster they rename it and continue to try to force it through. And, yes, they ignore the fact that the current financial problems are a direct result of financial deregulation that has come in as a part of the Reagan Revolution.
Krugman calls it the Dilbert Solution. See a problem and bring out organization charts to pretend you are doing anything besides just talking about the problem.
Addendum I - 7:59 PM
dday over at Digby's hullabaloo provides a good wrapup of reasons why the current Republican economic proposals are crap.
Barack Obama explicitly connected the current crisis to the bipartisan practice of deregulation. This is part of a culture of laissez-faire economics that has shifted risk to individuals and removed risk from corporations, and Obama's speech talked about the need to radically change that midset with actual regulation instead of putting new names on the same old ineffective regulatory agencies. Corporations for too long have, as Bob Borosage said, been given "the freedom to gamble with other peoples’ money ... protected by lavish campaign contributions and powerful lobbies."That person is McCain's economic brains - Ex. Sen Phil Gramm (R-TX) about whom I wrote last Saturday.
One thing we all know is that John "Let's Schedule A Meeting Sometime" McCain would offer the same Hoover-like do-nothing approach. But it's striking how many connections there are between McCain allies and surrogates and every aspect of the financial crisis. After all, some top campaign advisors of his lobbied for the shady lender Ameriquest, one of his top surrogates Carly Fiorina is a welfare queen whose company paid off her mortgage between 1999 and 2003, the most recent RNC chair is saying that his non-plan to deal with the mortgage crisis is incomplete, and his top economic advisor is perhaps most responsible for the crisis itself: