Population Statistic: Read. React. Repeat.
Thursday, December 04, 2021

Just how far will this economic crisis alter the functioning philosophies of U.S. political factions? For now, it’s prompting some major 180ing by a certain Treasury Secretary:

[Henry] Paulson’s litany of prescriptions to update the nation’s regulatory structure for the 21st century, which he repeated yesterday, could have been lifted from Obama’s speech last spring at New York’s Cooper Union: a Federal Reserve system empowered to monitor for system-wide risk, a federal check on state mortgage regulators, charters for hedge funds, expansion of regulation to cover complicated instruments like credit default swaps, more checks on rating agencies.

“We need a full sweep of authority to deal with nonbank institutions,” Paulson said, “so we can have an orderly wind-down without threatening the system.” He added that “much more needs to be done in really understanding the global imbalances and the huge flows of capital that help contribute to this.”

None of which Obama would disagree with. So this begs the question: Has the age-old political argument between state-friendly liberals and free-market conservatives lost its juice? Is there no room in the center of American politics for free-market purists, just as there’s been no room since the 1970s for leftist ideologues who question the free market?

Of course, the “free market purist” hasn’t seriously participated in this country’s political dialogue since before the Great Depression. For all the rhetoric of tearing down the welfare state to achieve a more unregulated playing field, no one — including the heftiest economic players — wants to go back to an early 20th Century model of extreme boom-and-bust cycles. The spaces at the policy table are reserved for those who want to modify the degree of central influence on the economy, not to either make it absolute nor to make it absolutely disappear.

by Costa Tsiokos, Thu 12/04/2021 08:04:57 AM
Category: Business, Politics
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