A Fine Madness in the D.C. Air; Our Financial 'Remedies' Are Apt to Deepen Our Long-Term Woes

The Washington Times (Washington, DC), June 16, 2009 | Go to article overview

A Fine Madness in the D.C. Air; Our Financial 'Remedies' Are Apt to Deepen Our Long-Term Woes


Byline: Tony Blankley, SPECIAL TO THE WASHINGTON TIMES

To borrow Niall Ferguson's metaphor - if finance is an evolutionary process, then regulation is its intelligent design - a cognate of faith, not science.

Or, to take the observation of former Federal Reserve Gov. Frederic S. Mishkin that the financial system [is] the brain of the economy, then, I would suggest, heavy regulation is its lobotomy: While it removes the emotional highs and lows, it also dulls the perception, facility and adroitness. (Disclosure, In keeping with my long-held public view: I give professional advice to financial institutions seeking low regulation and taxation.)

A century ago, medical science had faith in lobotomies. Today, it would seem Washington political science has faith in new financial regulation.

Medical science began to gain wisdom when it learned what previously unrealized damage it caused when it lobotomized a human brain. We must hope the experts today who are drafting new regulations by which they would impair our financial system may soon gain wisdom by recognizing how little they understand the effects of these new regulations on our economy's future health.

However, the current financial regulatory efforts in Washington may not even deserve the honor of being compared to intelligent design or a lobotomy. At least with those two processes, each has the intellectual dignity of an internal logic (even if those logics do not accurately describe the reality they attempt to explain and manipulate).

Rather, the current likely financial regulatory efforts have an almost random nature to them as the legislative log-rolling is collecting unrelated and sometimes inconsistent ideas that eventually will be called, I assume, the Frank/Dodd Comprehensive and Rationalized National Financial Redemption Act of 2009.

The final bill will be the compilation of the results of various political battles being fought among the president; his various White House economic and political advisers; the Treasury; various powerful committee and subcommittee chairmen in the House versus their equivalents in the Senate; the successful interventions of various interests; the institutional partial victories that will be gained in the current battles among the half-dozen or so existing, overlapping financial regulatory agencies; plus whatever the whimsical effects will be of the backbenchers, the states, the commentators, the media and, of course, the public.

Even if the 10 smartest financial regulation experts in the world got in a room and wrote an internally consistent set of regulations, if history is any guide, it would not be likely to anticipate, avoid or mitigate whatever the next financial crisis would be. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Fine Madness in the D.C. Air; Our Financial 'Remedies' Are Apt to Deepen Our Long-Term Woes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.