In particular, I was struck by how angry both sides are at “Washington.”
I am not certain what they mean by Washington. The city itself has terrible humidity and awful traffic, but that’s clearly not what they are talking about. I think they mean the way government does business, and here I am puzzled by both sides’ anger, but especially by Senator John McCain’s.
First, there’s the endless complaining about waste, fraud and abuse in Washington…
…There always seems to be more waste, fraud and abuse to complain about. And if my poor old memory doesn’t fail me, the endless investigations of waste, fraud and abuse turn up pretty small potatoes in a federal budget approximating $2.4 trillion. And even if earmarks were totally wasteful, I read that they totaled $18 billion last year. Not pennies, for sure, but a tiny blemish on a federal budget roughly 150 times that sum.
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It’s sometimes awfully hard to define waste. It’s largely subjective. And as far as I can tell, it’s either not a huge number, or it is so deeply woven into the fabric of government that it cannot be determined….
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Then there is that aspect of the war against Washington in which candidates — very often, my fellow Republicans — rage against the machine of regulation. Indeed, this is a constant refrain of the conservatives I call my pals. Regulation is stifling growth and entrepreneurship, they say.
With respect, I don’t see it. Look at the major debacles in the economy in the past quarter-century. The junk-bond scandal of the 1980s was largely a result of a failure of regulation. The tech boom of the 1990s and the subsequent bust were greatly facilitated by a lack of regulation over fiduciary behavior by underwriters and investment banks. The problem was not too much regulation, but far too little.
…the current financial madness [has been] caused by wildly imprudent lending by major banks and investment banks. Basically, a major piece of deregulation, the Gramm-Leach-Bliley Act, overturned most of the laws that had kept commercial banks and investment banks separate. This made it much easier for monster-size banks to lay down enormous bets on the direction of housing prices.
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My point is that Washington — that is, the federal government — is not really to blame for all of our current problems. (One glaring exception is the war in Iraq.) Or, to put a finer point upon it, in some ways Washington was not doing too much, but should have been doing more — meaning more regulation and more prosecution.
Go read it all.
(You will hear a lot of blather from the usual right wing sources in the months ahead that Bill Clinton signed off on the Gramm-Leach-Bliley Act in 1999; please point out to them that the bill was passed by Congress with a veto-proof majority. Opposing it would have been an exercise in futility.
Then again, some might find flailing against the inevitable to be an act of maverick-y maverickness with no purpose…
Ah, but to describe it thusly is redundant redundancy, innit?