• A Crude Debate

      "A party that stands with Wall Street is a party that stands against families and fairness."

      That's a crude argument. Yet it was made by Senate Majority Leader Harry Reid. I suppose it plays well with those who despise free enterprise.

      David Harsanyi today makes good points about the shallowness of the debate over financial regulation:

      (W)hat Reid's words reveal is an ideological disposition that is wholly unconcerned with creating a healthier Wall Street or a Wall Street scrubbed of crony capitalism and government-produced moral hazard...

      (H)ow many voters manipulated by the fear-mongering of Chris Dodd, Reid or Barack Obama fully understand reform?...

      How many of us are aware that these derivatives that politicians rail against are financial tools that often allow people to hedge bets and take insurance on risk? As The New York Times recently reported, entities like Mars, the maker of M&M's, like to dip into the derivative market to insulate themselves from fluctuating prices of sugar and chocolate...

      How many voters are aware that the Senate reform bill clamps down on
      "angel investors" — wealthy individuals who invest in startups ...

      What is appropriate risk? Well, who else but politicians and bureaucrats, both genetically disposed to avoid risk, could be better judges? That is the kind of micromanaging Washington is proposing.
      Would it not make more sense for government to disentangle itself from the market (and the bailouts), enhance transparency and simply enforce the rules already in place?

      Yes, it absolutely would. But government disentangling itself from the market is not on the table.

      Our attention is to be diverted by a show trial of Goldman Sachs...

      And for those reflexively averse to risk, profit and markets, this is an opportunity like no other.