Deregulation is the Cure All?
For all of the (rightful) ribbing that Obama/Biden have received, I couldn't help but shudder at the lead paragraphs of the WSJ story on Sarah Palin's speech to Hong Kong bankers (whether or not the initial invite was a joke).
HONG KONG -- Former Alaska Gov. Sarah Palin, in what was billed as her first public-speaking engagement outside North America, blamed the world financial crisis on government excesses and called for a new round of deregulation and tax cuts for U.S. businesses. "We got into this mess because of government interference in the first place," the former Republican U.S. vice presidential candidate said Wednesday at a conference sponsored by investment firm CLSA Asia-Pacific Markets. "We're not interested in government fixes, we're interested in freedom," she added.
Just think about this for a minute. Out of all of the commentary that you've heard about the financial crisis, how many blamed too much regulation? How many said we should further deregulate the banking sector which nearly crashed the world economy? Those lines are so far out of touch with reality. I don't even know where to begin. I don't think she has a grasp of what really went on. That's a line of an ideologue, not a leader. The answer to everything is not less regulation, which is exactly what the speech asked for. We got less regulation and we got a banking system that was so addicted to risky behavior that it nearly took us all out with it. We got a banking system that had no problem foisting crap investments on everybody else while knowing what they were sowing but that didn't care because they were getting paid. Is this the world that Mrs. Palin wants more of?
No, the Fed was not blameless in inflating the housing bubble with low interest rates for too long. But to say that the Fed's failure is a failure of regulation and proves that banks should be further deregulated is simply ludicrous. We've tried that and within 10 years of the repeal of Glass-Steagall we had another 1929 moment in the banking sector.
If this was supposed to be her coming out party for the new Sarah, I think she should go back into hiding for a few months and try again. I'm still of the opinion that she's the conservative Jesse Jackson and from what I can see (from the notoriously liberal WSJ) this speech did nothing to sway that.
