E J Dionne Brainfarts in the WaPo

Whenever there is an economic crisis, the left immediately start howling that free-market capitalism is to blame, and that the government must supervise commerce. They don't explain how government officials have acquired some special wisdom that enables them to shepherd the economy any better than private individuals making their own decisions. They merely take it as given.

It is in this spirit that E J Dionne talks about Capitalism's Reality Check:

The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.
Since the Reagan years, free-market cliches have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.

But Dionne does not mention the names of any prominent conservatives who have made this 'recognition'. The two names he gives are Irwin Stelzer, a guy I never heard of before, and Federal Reserve Board Chairman Ben Bernanke:

While Frank is a liberal, the same cannot be said of Ben Bernanke, the chairman of the Federal Reserve. Yet in a speech on Tuesday, Bernanke sounded like a born-again New Dealer in calling for "a more robust framework for the prudential supervision of investment banks and other large securities dealers."

Um, Dionne, I hate to contradict you. But just because Bernanke was appointed by Bush doesn't mean he is a conservative. Ben has always been quite committed to Keynesian economics.

Dionne also quotes Barney Frank extensively, as if the little leprechaun is also a conservative:

Frank also calls for new thinking on the impact of free trade. He argues it can no longer be denied that globalization "is a contributor to the stagnation of wages and it has produced large pools of highly mobile capital." Mobile capital and the threat of moving a plant abroad give employers a huge advantage in negotiations with employees. "If you're dealing with someone and you can pick up and leave and he can't, you have the advantage."

So what is the solution? If the government prohibits a company from moving its operations overseas, what's to stop them from just shutting down? Many will have to do just that if they are unable to compete.

And some more words of socialist wisdom from Frank and Dionne:

He noted that in 1999 when Congress replaced the New Deal-era Glass-Steagall Act with a set of looser banking rules, "we let investment banks get into a much wider range of activities without regulation." This helped create the subprime mortgage mess and the cascading calamity in banking.

The practice of securitizing mortgages predates 1999 by about 20 years. It was started by GNMA, a government agency. The repeal of Glass-Stegall had no effect on the practice. There are some investment banks that are heavily involved in commercial banking (Bank of America, J P Morgan), and some that are not (Merrill Lynch, Goldman Sachs). Prior to 1999 the commercial banks could simply have their mortgage-backed securities underwritten by a separate investment bank. It didn't have to be an in-house deal.

Idiots like Dionne and Frank feel that the government can do better. Ignoring the fact that much of the subprime mess resulted from government officials demanding that banks make more loans to people with lower incomes.

So are we to believe that a handful of Democrat government officials, like the previous occupant of the white house, are to be trusted to honestly and intelligently manage the socialist utopia? When you have politicians like the Clintons who rent out rooms in the white house like it is a motel 6, sell burial plots in Arlington National Cemetary, and sell pardons to the highest bidder?

The mind boggles.