Editore"s Note
Tilting at Windmills

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April 22, 2010

QUOTE OF THE DAY.... By now, the pattern should be rather familiar: policymakers identify an issue in urgent need of attention; Democrats propose a worthwhile solution; Republicans balk; and President Obama delivers a big, high-profile speech to put things right.

With this in mind, the president was in New York City earlier, speaking from Cooper Union about the need to bring safeguards and accountability to a financial industry that nearly destroyed the global economy. It was less a stirring address and more a prosecutor's closing argument. Treating financiers like a skeptical jury, the president urged Wall Street to change course: "[Pending proposals] represent significant improvement on the flawed rules we have in place today, despite the furious efforts of industry lobbyists to shape them to their special interests. I am sure that many of those lobbyists work for some of you. But I am here today because I want to urge you to join us, instead of fighting us in this effort. I am here because I believe that these reforms are, in the end, not only in the best interest of our country, but in the best interest of our financial sector."

Obama also took a moment to defend his commitment to the free market, though he added, "a free market was never meant to be a free license to take whatever you can get, however you can get it."

But it was a quote from a magazine article that was perhaps the most memorable aspect of the remarks:

"There has always been a tension between the desire to allow markets to function without interference -- and the absolute necessity of rules to prevent markets from falling out of balance. But managing that tension, one we've debated since our founding, is what has allowed our country to keep up with a changing world. For in taking up this debate, in figuring out how to apply our well-worn principles with each new age, we ensure that we do not tip too far one way or the other -- that our democracy remains as dynamic as the economy itself. Yes, the debate can be contentious. It can be heated. But in the end it serves to make our country stronger. It has allowed us to adapt and thrive.

"I read a report recently that I think fairly illustrates this point. It's from Time magazine. And I quote: 'Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed ... would rivet upon their institutions what they considered a monstrous system ... Such a system, they felt, would not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.' That appeared in Time magazine -- in June of 1933. The system that caused so much concern and consternation? The Federal Deposit Insurance Corporation -- the FDIC -- an institution that has successfully secured the deposits of generations of Americans.

"In the end, our system only works - our markets are only free - when there are basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system. And that is what these reforms are designed to achieve: no more, no less. Because that is how we will ensure that our economy works for consumers, that it works for investors, that it works for financial institutions - that it works for all of us.

"This is the central lesson not only of this crisis but of our history. It's what I said when I spoke here two years ago. Ultimately, there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation."

It's funny, in a way -- hysterical conservatives offer the same shrieks, generation after generation, and with the benefit of hindsight, they always look ridiculous.

Nevertheless, there's been a fair amount of progress in the Senate of late, and success appears all but inevitable. Here's hoping the president sealed the deal.

Steve Benen 1:10 PM Permalink | Trackbacks | Comments (16)

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The conservative appeal has always been to the lizard brain -- fear of change, fear of the other, and gimme-gimme-gimme. And the lizard brain has been with since (so to speak) we were lizards. It's no surprise that they repeat themselves.

Posted by: dr2chase on April 22, 2010 at 1:19 PM | PERMALINK

-a well crafted quip trumps a Luntz every time. . .

Posted by: DAY on April 22, 2010 at 1:21 PM | PERMALINK

It is sad that the mind set of greed that runs these organization cannot accept that regulations will have the collateral benifit of keeping them for self-emolating.

If the public is protected from their failure then to a great extent they are protected from failure.

If the government allows them to fail then they will police themselves or fail.

This is a case where what's good for the gander is truly good for the goose.

Posted by: Marnie on April 22, 2010 at 1:28 PM | PERMALINK

And there was MSNBC reporting from the floor of the NYSE interviewing some trader doofus ..." I think too much regulation will stifle business and creativity damaging the free market. Things were much better under Reagan when there was less regulation. "
I guess he made money on the Savings and Loan crash.

Posted by: john R on April 22, 2010 at 1:28 PM | PERMALINK

Yeah, sounds like the sort of thing a Commie would say...

Hey, who let your creepy angry uncle use my screen name?

Posted by: slappy magoo on April 22, 2010 at 1:30 PM | PERMALINK

It is telling that Obama can go back to 1933 to indirectly allude to the necessity of decency and honoring the common good -- two foundations of civilization. Two basic values that have deteriorated greatly over the last 30 years, and not only in the financial institutions, but especially there...

... and in Washington, where the klepto-oligarchy houses its puppet show.

Posted by: neill on April 22, 2010 at 1:31 PM | PERMALINK

Perhaps, you should mention, Steve, the applause the President received just after saying "1933".

Posted by: berttheclock on April 22, 2010 at 1:33 PM | PERMALINK

The banksters will, no doubt, accuse Obama of being Sithish; of giving them the choice of "join or die." Before the weekend is out, at least a few of them will openly declare that "You can have my greed-infested, unfettered free market when you pry it from my cold, dead hand with a crowbar."

Did I ever tell you about my good friend, Mr. Crowbar?

Posted by: S. Waybright on April 22, 2010 at 1:42 PM | PERMALINK

"Things were much better under Reagan when there was less regulation. "

Correct me if I'm wrong, but wasn't there much more regulation in the 1980's, before Glass-Steagall was repealed.

Posted by: Johnny Canuck on April 22, 2010 at 1:45 PM | PERMALINK

Next Sue Lowden idea

"My solution to the foreclosure is to barter with JP Morgan Chase and as your future Senator I think they'll accept some kind of barter as payment for your morgage. I've bartered with my bank a bunch of times"

"But Sister Sue, I have no pigs."

"We'll perhaps there's something you can do around the bank, you know clean floors, wash windows."

Posted by: KurtRex1453 on April 22, 2010 at 1:48 PM | PERMALINK

I for one would unashamedly rather have the issue than the bill this year. We can get the same bill next year. I understand the concept of legislative momentum and I sense that this is what is motivating the President. But the progressive agenda is dependent on the low information voter clearly realizing that it is the Republican party that is the true enabler of Wall Street and the big banks. That it is they and not the Democratic sponsored Stimulous Bill that should be the object of the populist rage coursing through the body politic right now. This is why the Republicans are desperate to take this issue off the table as soon as possible and this is precisely why it is important for the Democrats to keep it alive. This is much bigger than just this bill. As such, it is better to have the issue than the bill right now. It won't make that much difference whether this legislation is passed now or next year, except that by next year everyone will clearly understand who's side who is on.

Posted by: SW on April 22, 2010 at 1:49 PM | PERMALINK

Nobody really wants to walk down a dark ally. People prefer a lighted street because there is much less chance of getting mugged. Same with market regulations. Markets have to be regulated to make them attractive. Excessive deregulation is bad for all of us, including Wall Street players.

Posted by: Ron Byers on April 22, 2010 at 1:49 PM | PERMALINK

"I believe that these reforms are, in the end, not only in the best interest of our country, but in the best interest of our financial sector"

I hope Pres. Obama doesn't think the Wall Street big boys will voluntarily take actions that lower the size of their bonus checks.

SW, great, great comment.

Posted by: zak822 on April 22, 2010 at 2:30 PM | PERMALINK

@ Johnny Canuck You are correct , but everything was better under St Ronnie, Dontcha know. They especially liked the part where there was an old senile guy in the Whitehouse

Posted by: john R on April 22, 2010 at 3:18 PM | PERMALINK

@ Johnny Canuck
Congress allowed S&Ls to speculate in 1981.
That was nothing compared to the legistation that Clinton signed which took the lid off.
Followed by de funding and un staffing of the regulatory agencies by Bush, we are lucky the country exists at all.
The Repubs don't want to take any blame for the mess they made.

Posted by: Maude on April 22, 2010 at 4:52 PM | PERMALINK

Knew it was an early Time article when I read the quote. The New Yorker just ran a piece on the rivalry between Harold Ross and Henry Luce that mentioned Wolcott Gibbs' parody of Time, which included the unforgettable "Backwards ran sentences until reeled the mind."

Posted by: ericfree on April 22, 2010 at 4:54 PM | PERMALINK



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