DAN'S PAPERS, September 26, 2008 Page 32 www.danshamptons.com (continued from page 19)
deserve, it’s small potatoes. There are reasons for banking laws. One is that, at the end of a chain letter involving housing, what people get is to lose their homes and wind up on the street or in with relatives. And yet we cannot help ourselves. Which is why we need regulations, SOME regulations. And people to enforce them who don’t have their irons in the fire being regulated. When this country was founded, those who did so realized that people are not all they are cracked up to be. That is why we have the judicial system monitoring Congress, Congress able to impeach the Chief Executive and the Chief Executive able to veto Congress. I can’t think of any other system in the world that thinks everybody is no damn good. Sure works.
The last time we had a huge economic catastrophe was during the Reagan Administration, another Republican administration. Reagan created Savings and Loans so that “banks” could lend money without having to worry about banking regulations. People without a dime in their pockets were loaned money to open shopping centers. Lots of construction went on. Lots of new jobs were created. But when the shopping centers failed, the loans went delinquent. And so Wall Street needed a bailout. That bailout, as I recall, cost about a half-trillion dollars. Before that was another Republican catastrophe that happened during Coolidge and Hoover, when everything came crashing down into the Great Depression.
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Democrats who go overboard with regulation don’t cause such drama. They cause glut and malaise. People push paper. The economy slows to a crawl. But it doesn’t scare the hell out of everybody. An interesting thing to note is that during all three of the Republican catastrophes, the Republicans in charge, just six or seven years before the catastrophe, allowed the rich to cease having to pay large taxes. Huge amounts of wealth were accumulated among very few people in amounts that one might call “hoarding.” (Reagan said if the rich get very, very rich, it would trickle down, and it did. Then — crash.) A coincidence? Maybe. But one might say that those wonderful Bush tax cuts, mostly for the rich, will now, to finance the bailout, have to be paid anyway. Hopefully those who hoarded wind up paying the most. There’s a certain symmetry about it. Here are a few other interesting things to note. One is that the decisions being made about how to run the country this month are being made by regulators. They told the president what to do. Now they are telling Congress Two is that Wall Street cannot be allowed to die. If it does, everybody loses. The rich lose their businesses, the upper-middle class lose their savings and pensions, the lower-middle class lose their jobs and the poor lose their services. In fact, the whole world slows to an economic halt.Which, in an odd way, at least fights global warming. Three is you can’t blame people for behaving the way the founders of our country expected they would. You have to blame the administration. They’re the ones that did not rein in the Ponzi scheme. Four is that, when choosing between the Republicans and the Democrats, there is something to be said for staying somewhat near the middle of the pendulum swing, a little to the left, a little to the right. You don’t get either wild or ho hum. But you do chug along. One hopes sooner or later, we learn that. •
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Wall St.