Today in the New York Timess David Brooks wrote this:
"What we need in this situation is authority. Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up."
Can someone please tell me what this means? Because to me "heavy-handed government regulation" actually means simply "regulation" which means legal limits set on banking which, if we still had, would have meant our economy would have unfolded quite differently over the last 20 years. I understand nothing about what's happening, but I'd guess that with at least some regulation, some sense of rules and the limits of lobbying to undo them, the free-wheeling sub-prime-debt swapping ponzi scheme that made billionaires and now will bring our economy to its knees might not have happened. (I really must read Free Lunch by David Cay Johnston.)
More to the point, what does "public institutions that can guard against corrupting influences" mean? Does it mean a Treasury department that's not subject to the judiciary? I think it might. I think by "public institutions" Brooks might mean people like treasury secretaries and Fed chiefs and SEC commissioners because without laws (AKA regulations) institutions are run by people, people who need people, people who are beholden to people, people who like other people and do things for them and after sitting around in a group and thinking with them.
I know Brooks is a conservative and so for him "regulation" is actually a four-letter word. I know that he might mean something something else by "public institutions" than what I've guessed, but it's not clear what it might be, at least to me.
I'm not saying laws themselves aren't eventually interpreted (and, let's face it, avoided) by people who need people, of course they are. But a society needs rules, rules that protect the weakest among us and limit the most self-serving and those who've forgotten that the public good is not the same as their bottom line. If there aren't laws on the books to structure those limits, people simply continue to come in and out of institutions of authority. Some will hold the corrupting influences of sloppy money at bay, others will slosh around in them. So which would you prefer? Legal structures or the potential for all that sloshing? I think we've seen what the latter gets us. How about after the dust has settled, we get some well-considered version of the former. Mr. Brooks might not like it, but everyone else might. At least I will.