The Free Market at work

MANIFESTO

Via Atrios, Obsidian Wings points out,

It's actually hard to understand how the banks managed to do this badly: you'd think they could have done better hiring people off the street and paying them to put all those nice little loan documents into piles at random, or tossing mortgages down the stairs and bundling them based on how they landed. They certainly didn't need to hire people with advanced math degrees and pay them seven- or eight-figure salaries to get these kinds of results.

And how about those ratings agencies? They would have done a better job using a Magic 8-Ball to rate the [collateralized debt obligations].

It'd be nice to think that this was some kind of aberration, but we all (And by "all," I include the Senior Senator from Arizona.) know better.

This is just another Republican-sanctioned debacle (although clearly much worse than the 80s' S&L meltdown) where the free market idiotlogues felt that fiduciary bodies could be trusted to make reasonable and unselfish decisions. Once again, they were wrong. (And it goes without saying that the usual suspects continue to give their approval to the hideous situation as it's playing out.)

Needless to say, it's difficult to condone rescuing institutions that don't deserve a life jacket, but the alternative is surely worse: The collapse of many American banks would instantly create another Depression, and that is to be avoided at all costs. Thus, in the many financial bills now being considered, Obama is trying to make the distinction between the banks and the bankers. We'll see if the GOP fat cats allow him to run with that ball.