Obama campaign picks up on Krugman’s good advice

[Larkspur]

Obama campaign picks up on Krugman’s good advice

On Monday, the NYT’s Paul Krugman wrote some fair criticism of all three presidential candidates: they’re talking about the economy in general, but they aren’t sufficiently addressing the ongoing fiscal crisis. More importantly, they aren’t offering the kinds of regulations the system needs.

Now, the shadow banking system is facing the 21st-century equivalent of the wave of bank runs that swept America in the early 1930s. And the government is rushing in to help, with hundreds of billions from the Federal Reserve, and hundreds of billions more from government-sponsored institutions like Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Given the risks to the economy if the financial system melts down, this rescue mission is justified. But you don’t have to be an economic radical, or even a vocal reformer like Representative Barney Frank, the chairman of the House Financial Services Committee, to see that what’s happening now is the quid without the quo.

Last week Robert Rubin, the former Treasury secretary, declared that Mr. Frank is right about the need for expanded regulation. Mr. Rubin put it clearly: If Wall Street companies can count on being rescued like banks, then they need to be regulated like banks. <…>

are running more or less populist campaigns. But at least so far, neither Democrat has made a clear commitment to financial reform.

It looks like the Obama campaign got the message. The senator delivered a speech at Cooper Union in NYC this morning on the economy, specifically emphasizing “legal reforms needed to establish a 21st century regulatory system.”

From a purely political perspective, I’d just add that Obama did so a) while exposing the disaster of Bush’s economic policies; b) trashing McCain’s speech on the economy from Tuesday; and c) without mentioning Hillary Clinton, in any context, even once.

SNIP

Good job Obama! It's your job to listen to good advice instead of taking a good progressive-minded economist apart, especially an economist who had the courage to critique the Bush Admin when it was not popular to do so. Your policies definitely needed to be better and this shows that you, unlike Hillary and Obama-bots, ARE willing to listen to constructive criticism and make adjustments to you policy positions. My Audacity of Cynicism about you as a President decreases with good judgments like this.

[freethought]

1. Seems perfectly fair to me.

Way back when, the govt. created FDIC and with it banks had to accept controls on their behavior, and since then we haven't seen a repeat of the 1930s bank runs.
Well, if some of these fat cat Wall Street investment houses want to do make questionable investments with other people's money but expect Uncle Sam, or more accurately, the taxpayers to bail them out if they f__k up. It seems only natural that Wall St. would have appropriate controls and oversight on their activities.

You can almost already hear Wall Street crying bloody murder. Tough s__t for them. Last I checked, one major component of capitalism is RISK. Bear Stearns pushed it and they lost.