NYT: Springtime for Bankers

[Scuba]

NY Times says Republicans are setting us up for more, and bigger, bailouts.


http://www.nytimes.com/2011/05/02/opinion/02krugman.html


<snip>

Last year the G.O.P. pulled off two spectacular examples of bait-and-switch campaigning. Medicare, where the same people who screamed about death panels are now trying to dismantle the whole program, was the most obvious. But the same thing
happened with regard to financial reform.

As you may recall, Republicans ran hard against bank bailouts. Among other things, they managed to convince a plurality of voters that the deeply unpopular bailout legislation proposed and passed by the Bush administration was enacted on President Obama’s watch.
And now they’re doing everything they can to ensure that there will be even bigger bailouts in years to come.

Remember, from the 1930s until the 1980s the United States managed to avoid large bailouts of financial institutions. The modern era of bailouts only began in the Reagan years, when politicians started dismantling 1930s-vintage regulation.

Moreover, regulation wasn’t updated as the financial system evolved. The institutions that were rescued in 2008-9 weren’t old-fashioned banks; they were complex financial empires, many of whose activities were effectively unregulated — and it was these unregulated activities that brought the U.S. economy to its knees.

<end snip>