She still provides no acknowledgment of the government's regulatory role in causing the housing bubble (forcing lower lending standards on banks). With a blind eye to one of the key causes of the sub-prime market meltdown, she apparently feels perfectly fine about recommending even more government regulation to fix what the government helped break in the first place. Where does it end? Total government control of the economy? Haven't we even started to learn that centralized control of the economy is a bad thing? Simply note the failure of a long line of Communist economies prior to Chinese experiments in capitalism.
Though Blumner has historically stopped short of opposing the government's "bailout" plan, she takes every opportunity to whine about its impact on the little guy/gal.
Overlooking the lie (the government is purchasing shares in banks after initially proposing to buy up bad loans that held the potential for handsome returns well down the line, not simply giving the lenders money), it should be easy to see how the government was convinced to back the lenders: The economy will suffer badly, and the little guy/gal along with it, if credit gets frozen. The banks can only lend money if they have money to lend, and little guy/gal needs to borrow money for big ticket items. Even an editorial columnist with a lawyerly past might be expected to see that.How is it that you got the very economists who wrote Ph.D. theses titled, Government Must Never, Ever Act To Head Off Any Financial Bubble, to suddenly demand blank government checks for all the Too Bigs, when your bubble burst?
In the Too Small world this is all beyond our ken.
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