There's No Agreement Financial Markets Collapsed Due To Laissez-Faire Capitalism Run Amok, Says Spokesman For Laissez-Faire Capitalism Run Amok

David Brooks, "The Post-Lehman World". September 19

HERE, in handy run-on sentence form, is both the sum total of everything I know about economics (as would become obvious even without the explanation) and the reason for it: as a second-semester sophomore in 1974 I signed up for the introductory Macroeconomics course. It was one of many completely inexplicable gestures that litter my student record; it wasn't a requirement, had nothing to do with my degree, and I wasn't particularly interested in the topic. I lasted one hour, though I'm sure I'd decided to drop the course five minutes in, at most. The professor--actual professors taught intro classes in those days--looked remarkably like Hugh Hefner's slightly nerdier, myopic brother, circa 1957, and he spent the entire session "laying down the law" about the huge workload every student was going to have to meet, without fail or exception. This is, in fact, the reason I sat out the entire hour instead of getting up and walking out earlier; I didn't want him to imagine I was doing so because of his pathetic threats. By this time I'd spent a good twelve credit hours with actual European scholars, the sort who expected you to read three books a week for their class alone; the two-page course syllabus Mr. Business School laid on everyone with Jonathan Edwards-ish portents of doom and unceasing toil was risible.  I'm pretty sure I went right from the class to wherever it is you went to drop one.

So here's the thing. I can't tell you whether "Fannie Mae and Freddie Mac were probably the world's most heavily supervised financial institutions"--though neither, apparently, can Brooks, since he has to rely on quoting someone else saying so. I don't ordinarily loiter in the sort of areas where one hears lamentations about Clinton-era banking reforms, though I've spent plenty of hours hearing many of those same folks, presumably, lamenting Everything Else Clinton, not to mention Anything Which Gets The Rabble To Imagine It Can Interfere With What The Quality Know Is Best.  I'm old enough to remember somebody--perhaps the great-great-grandfathers of these economic Jeremiahs--blaming the Carter administration for the Great S&L Swindle, so you'll have to excuse me if I don't try to Google my way to the bottom of this. Hell, I'm not even going to say anything about a New York Times opinion columnist quoting Meganjane Galt-McArdle as an authority on this or any other topic, except, you know, don't.

Nah, let's try it this way. Don't like the impending era of re-regulation? Try blaming yourselves.

We’re going to need regulators who can anticipate what the next Wall Street business model is going to look like, and how the next crisis will be different than the current one. We’re going to need squads of low-paid regulators who can stay ahead of the highly paid bankers, auditors and analysts who pace this industry (and who themselves failed to anticipate this turmoil).

We’re apparently going to need an all-powerful Super-Fed than can manage inflation, unemployment, bubbles and maybe hurricanes — all at the same time! We’re going to need regulators who write regulations that control risky behavior rather than just channeling it off into dark corners, and who understand what’s happening in bank trading rooms even if the C.E.O.’s themselves are oblivious.

Try blaming yourselves! I know, in the popular imagining of its adherents--what others call "mythology"--the ecstatic defense of unfettered capitalism is supposed to result from Deep Philosophical Insight informed by dismally scientific observation and regular weekend retreats, but the fact of the matter is it's been sold, over the past three decades, as a magic cure-all and a talisman against falling objects. And it's failed. It's failed miserably, and spectacularly, and twice, twice with regard to holding the barn door open so unfettered financial institutions could gorge themselves on taxpayer corn. Twice. If a lot of us imagined that the whole thing was a transparent cover for the holders of wealth to accumulate more, and more again, well, that sure ain't the way you've been trying to sell it. It's a little late, now, to start moaning about the Epistemology of Regulation when you rejected anything other than ethical--or, as others might have it, metaphysical--certitude your entire adult life. You fucked up, man, and you fucked up in part because you believed--or chose to pretend you believed--that a slightly favorable tilt in your political direction was a permanent confirmation of that metaphysical certainty. Meganjane may yet plead youthful ignorance, though we think anyone who exits academia still imagining Ayn Rand as a thinker ought to sue for a tuition refund. You, David Brooks, cannot. You cannot pretend personal ignorance of The Great Savings and Loan Swindle, just as you cannot pretend the appeal to the Vast Complexities of Financial Markets--so recently so simple--obscures our view of the sleeping Republican at the switch each time these things occur. It would be best, of course, if you came clean, or acknowledged that Fucking Up is, rightly, punished by voters just as Hubris is punished by the gods. I'm no more sanguine about the prospects for real, intelligent reform out of Washington than you are, though in my case that's realism, not despair. But I'll say this: I think it's a lot more likely that we'll get useful and meaningful reform out of Washington than it is that we'll see the Sadducees of Reaganism accepting the blame.