The End of Reaganism

[CrimsonWhite]

Very good read.

We are, just now, stuck between eras. The old order -- the Reagan-age institutions built on the premise that the market can do no wrong and the government no right -- is dying. A new order, in which Wall Street plays a diminished role and Washington a larger one, is aborning, but the process is painful and protracted.

It shuddered to a halt on Monday, when House Republicans, by 2 to 1, declined to support the administration's bailout plan. To lay the blame on Speaker Nancy Pelosi's speech (in which she even noted the work of House GOP leaders in crafting the compromise) is to miss the larger picture: The proposal asked Republicans to acknowledge the failure of the market and the capacity of government to set things right. It asked them to repudiate their worldview, to go against the beliefs that impelled many of them to enter politics in the first place.

So as America experienced a financial crisis, House Republicans experienced a crisis of faith. And on Monday, most of them opted to stick to their faith, whatever the financial consequences for the nation.

Many of the Republicans' counterproposals to the bailout bill were so wide of the mark that they can be understood only as faith-based solutions to empirical problems. Banks and investment houses are toppling like so many dominos, and, to solve this crisis of capital evaporation, House Republicans suggested reducing the capital gains tax. Are we to believe that more investors didn't rush to rescue LehmanBearAIGWaMuWachoviaEtc because they calculated that the tax on the capital gains they'd realize was too high?

washingtonpost.com

 

[HoleInTheVoid]

What died?

As far as I can see the only crisis is a psychological reaction to idiots who lent deadbeats lots of money.

Having the bailout fail is exctly what this country needs to not only get through this episode but to prevent its repeat by enabling bad decisions.

 

[Ravi]

House Republicans suggested reducing the capital gains tax