REPUBLICAN DEREGULATION

Standing amid the devastating rubble of the Republican dismantling of the Glass-Steagall Act and other responsible, proven regulations, that had stood us in good stead for 66 years by assuring American citizens the government would guarantee that greedy bankers, brokers, and insurance companies wouldn't team up to steal their money ever again, I'm surprised to read a conservative editorial so soon from an Randian advocate of Lazziez-Faire Capitalism about the ills of government controls.

I won't highlight the blatantly partisan editorial, but the Texas Observer had an apropos article quoting folks who actually know what they're talking about

"Michael Panzner, a Wall Street veteran and author of Financial Armageddon, says the massive deregulation encouraged “aggressive, swashbuckling, high-risk practices that might have been frowned upon in the banking industry, but which were viewed as typical, say, on Wall Street.” Eventually, those practices “became the modus operandi throughout the financial services industry.”

Until, of course, Phil Gramm had a better idea (Gramm-Leach-Bliley, a 262 page addendum slipped into the budget bill in the middle of the night and signed by DINO Bill Clinton in 1999), which relied on the altruistic, patriotic tendencies of those desperately wanting to get rich at any cost.

"His critics say that Gramm’s anti-regulatory rhetoric failed the bulk of his constituents—which included thousands of hapless Enron employees who lost their life savings—but lavishly rewarded a few wealthy pals, like Ken Lay. University of Texas economist James Galbraith says Gramm is “not against government at all. His career has been finding ways to make money for his friends. It’s a predator relationship. [Government] is his food supply.”

The coup de grace leading to our current economic malaise was Gramm's promotion of unregulated trade in mortage default swaps vis a vis his onerous Commodity Futures Modernization Act.

"Still others blame Gramm’s Commodity Futures Modernization Act. Prior to its passage, they say, banks underwrote mortgages and were responsible for the risks involved. Now, through the use of credit default swaps—which in theory insure the banks against bad debts—those risks are passed along to insurance companies and other investors."

The fact is, we hardly need to debate Chicago School Theories, trickledown/voodoo economics, or the efficacy of FDR's intervention in the markets when so many recent blatant failures of deregulation since Reagan are self evident.

Economic theorists don't want to hear this, but "We The People" have every right, nay the responsibility, to lay the ground rules under which we will allow capital markets to function for the common good in our Democratic Republic - or we can find new capitalists who will.

Buying into unregulated markets leads to decimated and abandoned communities, and burgeoning foreign bank accounts filled with the untaxed profits of patriotic Ayn Rand acolytes.

Been there, done that, no thanks.