I had been hoping that the change of administrations would result in a change in the nature of the government's response to the financial crisis. So far, the biggest difference is that the responses are less ad-hoc. Unfortunately, they're still in the wrong direction. For this, I blame regulatory capture.
It is not that American regulators do not know what to do. They did it in the '80s, with the S&L crisis, and they told the Japanese for a decade that they should do what America did then. The Japanese were unwilling to face up to facts, said the Americans. In the same way, Americans lectured Southeast Asia after 1997, and blamed their failures on crony capitalism.
Funny, no one's talking about crony capitalism here and now, but it's clearly what America has.
It's like Churchill said, "You can always count on Americans to do the right thing -- after they've tried everything else." I think that's optimistic. America may not get the chance to try everything else this time.
That's interesting. I must confess that I've tended to view the phenomenon of regulatory capture as the legacy of Reagan-era deregulation. But as you point out, the way Reagan administration handled the S&L bailout stands in the starkest possible contrast to what is going on today.
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Date: 2009-03-05 11:47 pm (UTC)(no subject)
Date: 2009-03-06 02:48 am (UTC)(no subject)
Date: 2009-03-06 03:54 am (UTC)I had been hoping that the change of administrations would result in a change in the nature of the government's response to the financial crisis. So far, the biggest difference is that the responses are less ad-hoc. Unfortunately, they're still in the wrong direction. For this, I blame regulatory capture.
It is not that American regulators do not know what to do. They did it in the '80s, with the S&L crisis, and they told the Japanese for a decade that they should do what America did then. The Japanese were unwilling to face up to facts, said the Americans. In the same way, Americans lectured Southeast Asia after 1997, and blamed their failures on crony capitalism.
Funny, no one's talking about crony capitalism here and now, but it's clearly what America has.
It's like Churchill said, "You can always count on Americans to do the right thing -- after they've tried everything else." I think that's optimistic. America may not get the chance to try everything else this time.
(no subject)
Date: 2009-03-06 05:23 am (UTC)