McCain vs. Banking Regulation

by Berck

Jonah tries to hint that the republicans would have prevented the current situation if only the democrats would have let them.

She misses the point: The Republicans created the problem. Republicans, including John McCain, are responsible for the The Gramm-Leach-Bliley Act. This is the act that allowed insurance companies to get involved with investment banks. Without this act, AIG never could have bought into all those bad mortgages. McCain’s response? From the above-linked article:

McCain now condemns the executives at those companies for pursuing the ambitions that the Gramm-Leach-Bliley Act made possible, saying that “in an endless quest for easy money, they dreamed up investment schemes that they themselves don’t even understand.”

Unregulated capitalism, in spite of the Republicans fancies, doesn’t work. This is proof. They were wrong, and now they’re having to pay the consequences.

So, is the bailout a good idea? I’m inclined to think not. I think that we most certainly shouldn’t go anywhere near Dodd’s plan, and Paulson’s is even scarier. I suspect that all a bailout will do is toss $700 billion worth of inflation onto the fire. Keep in mind, this is essentially $700 billion worth of fake money. It’s not like anyone is loaning the money, the Feds are just going wish it into existence. The hope, of course, would be that it would be repaid, but this seems unlikely.

Let’s put it another way: Dubya wants a bailout more than the other republicans do. Let’s remember what happened last time he wanted something more than the other republicans.

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