Search This Blog

Thursday, July 31, 2008

A culture of Debt

David Brooks (New York Times, July 22, 2008: A19) omits one of the major actors in the consumer debt crisis: the Federal Government.

It is a given in the Republican philosophy that markets are self regulating. It is no accident that the last two major financial crises occurred during the deregulatory regimes of Reagan (the Savings and Loan collapse) and Bush (the Mortgage crisis).

I hope that we learn from these errors and ensure that a robust regulatory regime is introduced so that we no longer have to bail out these failing organizations.

By the way, I hear no chorus of offers of restitution from the executives who benefited during the good years. They should be called upon to pay back some of their excessive bonuses to help rehabilitate the firms which were brought low by their rash lending decisions.

Sent to the New York Times

No comments: