It's easy to write pieces like that when your conclusions have already been drawn. Basically, he took the conclusion that "the flawed incentive structures and the inadequate regulatory system" were the root cause of the problem and offered a bunch of conjecture, linked to Greenspan and free market principles to fit the notion.
It could just as easily be argued that regional and nationwide banks are better able to balance risk, and the net effect of Gramm, Leach, Bliley was that it has helped alleviate, rather than further the current financial crisis. Because, one of the things that has helped stabilize the current situation is the purchase of Merrill Lynch by Bank of America, which would not have been possible had Clinton not signed the bill into law. Besides, isn't he one of the smartest Democrats on the planet?
The piece is interesting, but it's not a thorough analysis. It's conjecture which fits a preconceived opinion. No one will know what happened for certain until we have a thorough examination, open up the books of these institutions, conduct lengthy hearings and investigate. It's similar to placing guilt on someone without giving them a day in court. Free market ideals have been found guilty, without so much as a hearing and placed as the root cause of the problem, because, liberal Democrats running the three branches of government want it that way. Why, because liberal politicians really don't care to know what happened. What they want to do is use this event as a tool to take control of private industry, and spend money like a drunk Merchant Marine who's just pulled into port after 6 months at sea, on every pet social project they've been drooling over for decades. That gives them power, and we're transferring huge amounts of it to politicians as each week passes.
If the problem was a "flawed incentive structure and inadequate regulatory systems", why has the problem impacted banks worldwide? Surely, they weren't impacted by Gramm-Leach-Bliley. Why are financial institutions controlled to a far greater degree than U.S. Banks dealing with the same turmoil?
Lastly, many policymakers, including Clinton Treasury Secretary Robert Rubin, have argued that the regulation of Credit Default Swaps would do more harm than good. So, that's another issue that's open for debate and needs to be examined.
The problem is we have lots of blogging professors writing opinion pieces, tossing innuendo and blame around, and it's passing as serious analysis to some, while no real investigations are being conducted. |
