Our illustrious Treasury Secretary, Timothy Geithner had this to say in a recent The Wall Street Journal op-ed about the role of government in private decision making. In setting up his meme, he described Bear Stearns’ risky investments and our own risky mortgage borrowing behavior.
Neither the Fed, nor any other federal agency, had the necessary comprehensive authority over investment firms…or the government-sponsored mortgage giants Fannie Mae and Freddie Mac.
Regulators did not have the authority they needed to oversee and impose prudent limits…. And they had no authority to put these firms, or bank holding companies, through a managed bankruptcy.…
Household debt rose to an alarming 130% of income, with a huge portion of those loans originated with little to no supervision and poor consumer protections.
Hmm…. He decries the lack of government control over our businesses and our personal borrowing. He decries government’s inability to bypass the bankruptcy court system (except for two dinosaur car companies, whose government regulation he doesn’t mention).
He insists that Government knows better the risks, government knows better the decisions that ought to be made. His solution, thus, is increased intrusive government management of our decisions and our businesses. As to the costs of this, he dismisses them:
Are the costs of reform too high? Certainly not relative to the costs of another financial crisis. Credit is relatively inexpensive….
He omits to add that cheap credit is due entirely to artificially suppressed Federal Reserve Bank rates—through which the Federal government is imposing an extreme inflationary risk on our economy. He omits to acknowledge that the financial institutions are under resumed government pressure to quit sitting on cash and to lend—by lowering credit standards again—another government-imposed risk to our economy.
Are these reforms complex? No more complex than the problems they are designed to solve. And, it should be noted, most of the length and complexity in the rules is the result of the care required to target safeguards where they are needed, not where they would have a damaging effect.
He chooses complexify a fundamentally simple problem: let the experts in business and business risk—businessmen themselves, exercise their own judgment, and suffer the consequences of bankruptcy if their judgment is faulty—or if they have bad luck. He doesn’t mention the fact that the same government that wants to insert its own lending judgment in the place of our own and our business enterprises is the same government that is still owed tens of billions of dollars by those two American car companies that can never be paid back—and that one of those dinosaurs isn’t even American anymore; it’s Italian. He also complexifies what is truly straightforward: get government out of the way, streamline regulations, and keep only those that are useful, with no overlap or conflicts. He also demonstrates a lack of understanding of the problem: if the targets of the safeguards need “length and complexity” to address, it’s because the regulators don’t understand the targets well enough to articulate them simply and clearly, so that, if actually needed, they can be “targeted.” The very complexity is another government-created risk.
Is there some risk that these reforms will go too far with unintended consequences? That depends on the quality of judgment of regulators in the coming months as they flesh out the remaining reforms.
Indeed. That’s another enormous risk imposed by a Know Better government. Look for instance, at the performance of the NLRB and the EPA, two example regulatory agencies devoid of objective judgment. These are Progressive regulators, but there’s no reason to believe that “conservative” regulators wouldn’t wind up just as abusive, just as lacking in judgment, albeit in another direction. The problem here is the existence of the regulators, not their political agendas. Today’s problem, though, is compounded by so many of the regulators being subject to no oversight.
And then there’s our health. Over in the legislative branch, Nancy Pelosi called the just-defeated Blunt Amendment a
“devastating legislation” and “the latest ploy in the Republican agenda of disrespecting the health of American women.” Planned Parenthood claimed the “dangerous proposal” would have allowed “your boss”—yes, yours—to decide “which prescriptions you can get filled and which medical procedures you can have,” including cancer screening, maternity care and AIDS medications.
Of course, it was nothing of the sort. It was simply an effort to restore choice to women’s (and men’s) health decisions. Yet, as the WSJ points out,
The fact that Democrats don’t dare to accurately describe their own positions, or the regulations that they want to foist on everyone else, shows how extreme those positions and regulations really are.
This is, then, what the Progressive government stands for. A big, intrusive Federal government making business decisions for Americans and our businesses and deciding our health issues for us. All, of course, with the best of intentions: to protect us from ourselves, and to protect us from our foolish decisions and their outcomes. But at what cost?
At the cost of our freedom to make stupid decisions, our freedom to make decisions with which our governmental Betters might disagree, and our freedom to profit from risky decisions, or safe ones, of our choosing and not of our Betters’. At the cost of our freedom to decide for ourselves what our health care might—or might not—entail..
At the cost of our ability to make any of our own choices. At the cost of honoring our responsibilities ourselves, rather than having them surrendered to government to handle for us.