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They cannot fathom failure

On his New Yorker blog, "Interesting Times," George Packer writes:

Obama isnt trying to remake Americas economy and society out of ideological hubris. Hes initiating sweeping changes because he inherited a set of interrelated emergencies that require swift, decisive action. Theres an instructive example for both [David] Brooks and Obamas supporters to bear in mind: Herbert Hoover became President with the sterling reputation of a practical man, an engineer and businessman who had succeeded at everything in his life. When the Depression began, he took what he assumed to be practical steps to ameliorate it. But, as Richard Hofstadter observed in The American Political Tradition, What ruined Hoovers public career was not a sudden failure of personal capacity but the collapse of the world that had produced him and shaped his philosophyBecause, on his postulates, his program should have been successful, he went on talking as though it were, and the less his ideas worked, the more defiantly he advocated them.This is an apt description of the current attitude of John McCain, Eric Cantor, and Bobby Jindal. Like Hoover, they cannot fathom the failure of their philosophy, so they cling to it and insist that it has all the answers while the country drowns. Conservatism, pace Brooks, is no more likely to be clear-eyed and critical-minded than liberalism. Any set of ideas can harden into ideological certainty, especially when its been in power for a long time. Obamas emphasis on government intervention could become as calcified and resistant to facts as the Republican Partys free-market conservatism is now. If or when it does, Obama will need to hear from Brooks all the more. But for the moment, Obama is necessarily experimenting in the face of disaster much like the President who followed Hoover.

Read the rest here. "[T]hey cannot fathom the failure of their philosophy." Not "they will not fathom" it. They cannot. Sure, the response of many conservativesto the bailout and the stimulus packagehas beenopportunistic and cynical. Many of them, though, simply cannot imagine what it would mean -- what it now does mean -- for the premises of their policy agenda, and indeed of their entirepolitical philosophy, to have failed.Not even the most spectacular failurecan force anyone to learn a lesson he desperately wishes not to learn. Historical events are always complicated and contingent enough to admitof more than oneinterpretation, and the most plausible interpretation is not alwaysthe most attractive."The financialcollapsecould mean that our financial industryhas beenunderregulated and overleveraged for many years, andthat the power of centralized capital requires centralized public oversight to keep it in check. In that case I and my allies havebeen fools.Or it could mean that any regulation is too much regulation, and that the market only works when banks are allowed to fail, no one's money is guaranteed by the government, and everyone must look out for himself. In that case I'm one of a small remnant of brave prophets who are destined to be ignored by all theweaklings now looking to Washington for safety."If it were only a matter of rationally evaluating the available evidence,it would be hard at this point not to favor the first of these interpretations. But of course it is never just about rationality; itis also about saving faceand even, sometimes,saving one's very self. What is true of religious conversions is also true of ideological conversions: theold man does not yield easily to the new. Even Paul did not leap up from the ground,jump back on his horse, and ride straight to the nearest village to begin evangelizing. He was stunned, blinded, scared; and those fish scales stayed on for a while. In any case, there is no shame in silence. It is the normal reaction to disorientation. (Alan Greenspan cut a noble figure as he quietly ate three decades' worthof placid reassurance.) The shame is in simply raising your voice andyelling the same thing you were saying before, this time with your hands clapped over your ears: "Laissez-faire capitalism has not been tried and found wanting; it has been found wanting and left untried."Like the man said -- time to putaway childish things.

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Matt,I admit I have not yet read Packer's entire essay. But based on what you quoted, where is the evidence that his theory is not as ridiculous as the ones he disagrees with. More conjecture it seems to me.

"Like Hoover, they cannot fathom the failure of their philosophy, so they cling to it and insist that it has all the answers while the country drowns. Conservatism, pace Brooks, is no more likely to be clear-eyed and critical-minded than liberalism. Any set of ideas can harden into ideological certainty, especially when its been in power for a long time."Sound like any other bureaucracy we know?

"'[T]hey cannot fathom the failure of their philosophy.' Not 'they will not fathom' it. They cannot."Sounds like a description of an addict. What they need is a 12-Step program. Start with number one: We admitted we were powerless over the economy we created - that our lives had become unmanageable.

Too many liberal bromides here to swing a bat at. But I would like to make a point that I hope will be of help. Conservatives, especially those of the laissez-faire bent, are not utopian. Claims that laissez-faire capitalism are better than socialism rely on the fact that it has historically produced more times of prosperity than want, and allows people to live without the oppression of paternalistic government. Your problem is that you interpret conservatism as an ideology, which it isn't. There is no founding conservative manifesto. So what is especially galling in this current debate is that you attribute the worst pretensions of progressivism to conservatism, that being claims to infallibility.

Adeodatus said: "Conservatives, especially those of the laissez-faire bent, are not utopian. Claims that laissez-faire capitalism are better than socialism rely on the fact that it has historically produced more times of prosperity than want, and allows people to live without the oppression of paternalistic government. Your problem is that you interpret conservatism as an ideology, which it isnt."There is an economic theory called laissez-faire capitalism that may not be ideological, but American conservatism certainly is. (No need to feel bad, however. So is American liberalism.) We can see that in conservatism's current disarray and its attempts to define itself.Some conservatives have attached themselves in the current crisis to laissez-faire economic theory. But unlike the theory, which can be applied consistently, these conservatives only apply it to things that support their overall ideology. Big government, big spending, big deficits, and big "pro-business" regulation is all fine and good when they are in power. And just as business people do, when they fail miserably they fall back on "it could have been worse" arguments to tout their leadership.No one is promoting socialism in the United States.

Adeodatus,Thanks for taking a swing anyway.As far as I can tell from your comments on our blog, your position belongs squarely within the tradition of liberal economic theory, which is indeed an ideology. So careful with that word "liberal." My own economic ideology -- yes, I have one too -- is not liberal but social-democratic. To describe your opponent's position as ideological while declaring your own to be nonideological is itself a fairly tired piece of liberal ideology. So is the use of the word "paternalistic" to describe a political community that takes special care of its most vulnerable members. As for your last jibe, the liberal pragmatist (that's you) is in fact the worst kind of infallibilist, since he believes (like the Marxist) that he does not need to win his argument because history is winning it for him. No manifesto needed. This arrogance would be more tolerable if liberal pragmatists--or "free-market conservatives": I'll use whatever word you like--weren't such bad historians.

Istm that the critical point is that the economic crisis is not a crisis of competing ideologies. It is a crisis of economics. In other words, it is a technical problem, in need of a technical solution.The folks in power in the US government, all of whom happen to belong to the same party, are charged with doing what they can to turn around the economic decline. I believe that very few of them are ideologues, but certainly there are ideologues in their party who wish to advise them, and who in some cases have their ear. When there is a crisis, the tendency of ideologues is to promote solutions from their ideology. We saw the danger in this in the immediate aftermath of 2001: to answer the question, "We've been attacked; now what do we do?" neoconservatives stepped forward with solutions that were tailored to their ideology, but not to the facts on the ground. And they had the president's ear. Thus Iraq.Leftist political/economic ideologues have been wandering in the wilderness for several decades. The economic crisis is to them as the post-9/11 world was to neoconservatives: an opportunity. We must hope that our leaders resist their more extreme importunities. We don't need amply discredited leftist blather now. We need measured government intervention that will arrest the economic freefall, and a regulatory and tax framework that will provide the foundation for a sustained recovery.

Jim said: Istm that the critical point is that the economic crisis is not a crisis of competing ideologies. It is a crisis of economics. In other words, it is a technical problem, in need of a technical solution.I dont think I agree with this. There is no value neutral non-political technical realm of economics, despite what some economists would have one think. The economy is geared to an end and the end isnt simply the production of abundance. And even if it were, abundance itself still has to be defined.But be that as it may, there are lots of economists out there that are providing proposed solutions that contradict each other, all of whom are claiming to be making technical evaluations. Adeodatus seems to be proposing a laissez-faire solution as a non-ideological technical solution. But we have not lived in a laissez-faire economy for at least 125 (and maybe even 200) years. This is one of the hard truths that so-called conservatives dont seem to be able to recognize.

If I read Mr. Boudways post correctly he seems to think that we currently have a centralized capital structure. That may have been more nearly true when J P Morgan could turn around a panic almost single handedly. In that era there was even a not so obscure school of thought (Rudolf Hilferding and the theory of finance capitalism) that looked upon centralizing developments in early 20th century finance as making the transition to socialism far easier than Marx envisioned. And if we go back far enough, to the age of the Fuggers and the Medici, we can find other eras of highly centralized finance.Today, of course, there are very many large financial institutions. But their very number and diversity are consistent with decentralization. In fact with hedge funds, private equity funds, and multiple sources of capital around the globe decentralization may render attempted national political regulation increasingly myopic. Im not arguing for wholesale deregulation but rather that regulation based on an incorrect theory about current financial centralization runs the very large risk of becoming futile. So its a little early to label those who analyze current trends more broadly, or doubt the acumen of Timothy Geithners plans, as opportunistic, cynical and foolish.

"Today, of course, there are very many large financial institutions. But their very number and diversity are consistent with decentralization. In fact with hedge funds, private equity funds, and multiple sources of capital around the globe decentralization may render attempted national political regulation increasingly myopic."Is this decentralization or a relatively larger number of mega banks corresponding to a geometric increase in capital? I think that trend has been towards aquisiton and consolidation, not decentralization.As for regulation, what difference does it make whether there are five financial institutions or 5 million? At the very least they can be regulated in regard to their accounting practices and the valuation of their assets and liabilities.

Of course it makes a difference. How do you propose to regulate China's accounting practices or capital reserve requirements for their financial institutions?My main point, however, was to protest against the condescension toward those who are reluctant to undergo an ideological conversion as approved by those on the left. The latter are just as guilty as any benighted souls on the right of never questioning their philosophical premises and IMHO they frequently make empirical claims that are simply false.

Mr. Molloy,You make a good argument for the consolidation and nationalization of the commercial banking system, though I doubt that was your intention. But whatever you intended, your point is an interesting one and requires a response."Centralization" clearly means more than one thing. It sometimes means "consolidation," which is what you seem to have in mind. It can also mean "concentration," which is what I had in mind when I wrote this post. There has obviously been a proliferation of small financial institutions in the last few decades, though after the Gramm-Leach-Bliley Act repealed important provisions of the Glass-Steagall Act in 1999 some of these smaller institutions were bought up by large commercial banks. (Glass-Steagall, by the way, is a very good example of how strong regulation by the federal government can prevent the sort of centralization of capital you're talking about.) But the financial industry in general has lately controlled a greater share of the nation's wealth than it ever has before; and more people have been dependent on Wall Street than ever before -- because 401 (k)s have replaced most traditional pensions, but also because a higher percentage of the population is employed by publicly traded companies that are immediately vulnerable to a crisis on Wall Street. Centralization also means that most banks and investment firms, both in the U.S. and abroad, are involved in a single network of credit, with few firewalls to keep a subprime mortgage meltdown in the U.S., say, from threatening banks in the U.K. It only takes the failure of a few big institutions to paralyze much of the worlds economy. Finally, concentration of capital is another way of saying concentration of wealth. Do you deny that there has been a huge increase in the portion of the nation's total wealth that belongs (I'll spare you the sneer quotes here) to the richest five percent of the population? Do you deny that very little of the growth in the country's GDP has gone to the lower middle class and the working poor? Their real wages have been stagnant during the last several decades. I'm finally less interested in how many piggybanks the rich put their money into than in how much of our country's wealth ends up in their piggybanks. In a healthy democracy, political power constrains the power of capital. By this measure, ours has not been a healthy democracy for some time. No doubt those on the left often fail to question their prejudices and preconceptions -- no ideology has a lock on this vice -- and no doubt "they" have made false claims before. But as far as I can tell you haven't really found the false claim you were looking for in this post.

OK - so capitalism has "failed" because of the current crisis.Riddle me this - If a failure of capitalism is responsible for the current economic crisis (a point which is itself questionable) wasn't it responsible for eveything else leading up to it? I mean, doesn't it get credit for decades of prosperity, huge leaps in technology, etc.? Where did that come from? And if captialism is responsible for that, is this a failure or just a bump in the road?As Adeodatus says, free market capitalism doesn't claim to be inafalible, it simply claims to be better (way better if you look at the evidence) then the alternatives in creating properity for the greatest number of people and society as a whole.

Mr. Boudway,Im mystified to learn that Ive made a good argument for the nationalization of the banking system. Perhaps you can explain how my view lends itself so easily to the pro-nationalization side of the current debate. I freely waive all rights to my argument - anyone may use it for his own purposes, though I believe not many will take up my offer. For a nominal fee I will provide a much better one.By centralization you now say that you really meant concentration. It should be clear that concentration of wealth in financial institutions and concentration of wealth among the top 5% of individuals are two entirely different things. They can be positively or negatively correlated and there is no necessary causal connection either way. We could have one large institution holding 300 million equal shares or 30,000 institutions with equal assets but spread across a highly skewed distribution of individuals. You claim to be much more interested in the concentrated distribution of wealth across individuals. Thats obviously another large topic. In addition to the wealth and income trends you point out I would mention these few considerations as context for those trends: the changing composition of the labor force and immigration, the changing (deteriorating?) family, the increasing role of technical education, the lessening of inequality across sex, race, and regional lines. Its obvious that if all these topics should be considered by financial regulators we will be severely taxing not only the skills of Geithner, Bernanke, et al but of any conceivable group of Platonic Guardians. If the real concern is with reducing inequality of individuals I believe that goal is more directly reached through a highly progressive income or consumption tax rather than by subtle manipulation of financial regulations. But yet another meaning of centralization for you seems to be globalization - we are all involved in a single network of credit. Of course this would be a problem if we had numerous small institutions as well as a few large ones. Its an odd use of the word centralization (or concentration) and another big topic -- Do we need a global regulator?To be clear, I have plenty of reforms I would recommend, beginning with higher capital reserve requirements and greater transparency for some of the more sophisticated financial instruments. I have lots more if youre interested. But my main point continues to be that these kinds of reforms will more easily come if they are not required as part of a wholesale ideological conversion which you and Packer seem to believe is called for. Your approach is a little more therapeutic (put away childish things) than Packers gloating but I maintain that it is needlessly condescending.If anyone wants to read a response to Packer by one of those he singled out in his denunciation it can be found here:http://www.commentarymagazine.com/viewarticle.cfm/no-criticism-allowed-1...

I sometimes postulate an example when I am asked about health care reform that goes something like this: If there are two treatments, one of which is 40% effective but 100% affordable, and another that is 100% effective but only 40% affordable, which does more good? There is no doubt that the potential of the second is higher, but unless there is a way to find some reasonably equitable, not perfect, way of distributing it to more people, you can't call it better. Capitalism clearly has the potential to create more wealth than any other system, but if, unfettered, it leads to a kind of concentration of wealth in the hands of the few, and not only the lack of wealth, but potentially reckless wasting of wealth among many others, then it really can't be viewed as "better" by the mass of humanity that don't benefit from it anymore than they would benefit from a system that might produce less over all but distribute its fruits more equally. The trick has always been to channel capitalism enough to keep it from destroying itself and leaving the majority without its benefits, without unduly checking its potential to create a more robust economy overall. Even Alan Greenspan, pre-mea culpa understood that much -- the whole concept of the Federal Reserve is anathema to pure laissez-faire capitalism. The issue with him was that he thought it was "just enough" regulation to keep things from spiralling downward. Obviously, it was not.

" for regulation, what difference does it make whether there are five financial institutions or 5 million? At the very least they can be regulated in regard to their accounting practices and the valuation of their assets and liability"Unagidon --Indeed. It was plain even to this old living-on-a-cloud philosophy teacher that eventually the sellers of mortgages would run out of buyers, including people who bought huge houses with little money and those who bought little houses with almost none. I sold some land when it had increased 10-fold in value because I saw that the party couldn't last. If I knew this, surely the mortgage sellers knew their Ponzi scheme would end with a bang. And surely they could be regulated just like any other merchant who sells trash fraudulently.

Mr. Molloy,To begin with, let me try to demystify you about your accidental recommendation. If, as you argue, our banking system is no longer centralized as it once was, and if, as you suggest, this is precisely what makes it so hard to regulate properly, then we need to simplify matters somehow. Turning commercial banks (though not, of course, investment firms) into a public utility would be one way to do that, as Nassim Nicholas Taleb has argued persuasively.It turns out you and I agree rather more than I expected us to. If you are in favor of higher capital-reserve requirements for banks, more regulation for new financial instruments like credit default swaps, and a more progressive tax code to alleviate our staggering social inequalities, then you are not the sort of free-market fundamentalist I had in mind when I wrote this post. Nor are you in sync with the current leadership of the GOP.But that still leaves us with a few important disagreements. First, while it may be true that there is no "necessary causal connection" between the size of the financial industry relative to the rest of the U.S. economy and the extreme concentration of wealth among a very small part of the population, these two trends are indeed related. When a nation's wealth is more evenly distributed, less of it gets invested on Wall Street. If the part of our economic growth that has gone to the rich had gone instead to the middle class, people would have spent more of it on things they need or want now: down payments, tuition, ipods, etc. 401(k)s notwithstanding, playing the stock market is still mainly what people do with leftover money. And most of those small funds you referred to earlier cater exclusively to people who have a lot of extra money to invest. We might also note here that many of the people in the top income bracket have made their money in the financial industry. Everyone knows that unless you're seven feet tall the quickest way to make a million dollars has been to go into i-banking. So: Can I imagine an economy with the same kind of wealth distribution but a much smaller financial industry? I suppose, but it isn't easy.Next, you attribute our growing income inequality to "the changing composition of the labor force and immigration" and "the changing (deteriorating?) family," and I agree that these things are all related. I think we may disagree, though, about what's causing what. One of the dirty little secrets of laissez-faire capitalism that conservative pundits don't like to mention is that the free market is not especially kind to family values. Maximal growth requires a maximal labor force, and that means fewer parents at home with their children. Capitalism is also the engine behind immigration patterns: people who use to own their own farms in Mexico are driven off the land by free trade; some of them end up in places like New York delivering take-out or washing windows on the buildings the fund managers work in. They are the indispensable bottom row of capitalism's great pyramid. In order for there to be an Upper East Side, there needs to be a Spanish Harlem.I understand that gloating and condescension are unlikely to help the most fervid market boosters climb down from their folly, but much of what you are describing as condescension is really indignation -- and much of it is justified. Still, if it will help us resolve our differences (and even if it won't), I'll concede that I was making the word "centralization" do too much work. Score one for the capitalist.

Mr. Boudway,Since you state, as if it were beyond dispute, that "in order for there to be an Upper East Side, there needs to be a Spanish Harlem" I now find it easier to understand your indignation about our economy. Needless to say I don't follow this or your other causal assertions, leaving me with the conclusion that I'm afraid our differences are too great to be resolved in this forum.

I posted a longer form response to this post here for anyone interested:http://the-american-catholic.com/2009/02/25/lessons-from-the-financial-c...

For the record, I also disagree with the statement that in order for there to be an Upper East Side, there needs to be a Spanish Harlem." That suggests that the only social structure in which wealth accumulation is possible is one that relies on the great poverty of some percentage of people. This is a cynical capitulation that both right and left use to justify various extreme measures (whether it's reallocation of resources or complete indifference to suffering, which is viewed as necessary for anyone to be prosperous). The answer is called a safety net that reduces to near zero the worst effects of poverty.

Incidentally Paul did not get back on his horse because there was no horse.

"For the record, I also disagree with the statement that in order for there to be an Upper East Side, there needs to be a Spanish Harlem. That suggests that the only social structure in which wealth accumulation is possible is one that relies on the great poverty of some percentage of people. ... The answer is called a safety net that reduces to near zero the worst effects of poverty."I agree.I would add that the concentration of tremendous wealth, or the existence of a great disparity in wealth, are not intrinsically unjust. Justice demands that everyone, regardless of wealth or income, have access to those goods to which all humans have a right. The forcible redistribution of wealth or income can introduce new injustices that didn't exist previously.

The forcible redistribution of wealth or income can introduce new injustices that didnt exist previously.If one has to choose (and maybe not, but for the sake of discussion .) between the perceived injustice of wealth redistribution be means of repealing the obscene tax advantages of the truly wealthy VS the injustice of a society in which the disadvantaged many have to suffer because of inadequate tax income to support social programs which for the ever-increasingly impoverished numbers of US citizens is this really a matter of debate for Catholics and other Christians? Re-read and think about Matthew 25.31-46 during this Lenten beginning.

Right you are Jimmy. That has no bearing on markets at all. As for the preponderance of wealth in the last twenty years or so, it should be remembered that this was truly a quantum leap. Prior to that it was considered a lot of money if one earned a million or so a year. With precipitating mergers and acquisitions, people were making millions on one deal rather than in one year as was the custom prior to this new fantasy. As early as the eighties there were outcries that CEO's were laying off workers simply to raise their stock prices. In other words the decision had nothing to do with GNP but simply cutting costs rather than creating markets and jobs to keep people and the economy happening. The mortgage crisis is just the last straw. There was nothing else to squeeze out that bloated market. All that was left were Ponzi schemes and hedge funds. Again there were at least two decades of warnings. There is nothing wrong with capitalism. It is the fraud that is the problem. Do we say it is anti-capitalism when we arrest organized crime? Same principle here.

Sorry for the incomplete thought:" ... because of inadequate tax income to support social programs which for the ever-increasingly impoverished numbers of US citizens ...I should have complete the thought thusly: ....are the mainstay of their getting a breather, rather than descending into total debt and despair."And we won't even talk about that wonderful middle-class welfare call the mortgage interest writeoff.

Barbara,The rich (or "the Upper East Side") become rich partly by extracting value from the labor of the poor (or "Spanish Harlem"). This is a part of standard Marxist analysis -- though one needn't be a Marxist to credit this particular claim. Like any theoretical claim, it is open to dispute, but I don't see how you can call it a capitulation, much less a cynical capitulation.And this, by the way, is not what the Right says: the Right says that in a society of equal opportunity everyone can be rich if he's willing to work hard enough -- everyone can live in an Upper East Side, as it were, and if you don't it's because you don't want to, or because you're lazy or stupid. The left says that hard work is obviously not what separates the poor from the rich, and that safety nets, while necessary, are not the full solution to the underlying problem. The proper solution is to make sure people are paid properly for their work, and the market will not do this without political intervention. The point is not just to keep the poor at bay by saving them from the most extreme privations (what Jon Stewart calls "revolution insurance"). The point is to make sure that those who do one kind of work are not taken advantage of by those who do another kind of work. Not all of the "jobs of the twenty-first century" will be in management.I opened this thread by quoting George Packer. I'd like to close it by quoting something Michael Walzer wrote on the Dissent website in September. The problem, he reminds us, is not the greed of bankers; it is the failure of citizens and their elected representatives to control the force of capital and redress its worst effects.

"The truth is that the invisible hand doesnt always work, and so it requires some help from a visible handand that is the hand of the state. There is no other agency capable of protecting us from ruthless or reckless gain-seekers, for capitalist institutions too often reward both ruthlessness and recklessness. State regulation is, therefore, a necessary feature ofeven if it is also a social-democratic addition tothe capitalist system. When regulation fails, we are all in trouble. Deregulation is the major cause of the current crisis. And the cause of deregulation is what? Well, we might say that the cause is greed, which certainly motivates political as well as economic behavior. But that wont do, since greed was no less prevalent when the regulative regime, which we have been dismantling since the 1980s, was first put together in the New Deal years. The difference was that the political forces that believed in greed, and in the free market, and in the invisible hand, were less dominant then. The ideology of laissez faire had fewer true believers."If we are looking for people to blame for the current crisis, the right people are the market ideologues and the politicians they seduced. They are the ones who will benefit from scape-goating the bankers. And the appropriate response to them is political, not moral. We dont have to abolish greed (good luck!), but we do have to find our way to a better understanding of the role of the state in the economy. We have to take state power away from people who despise the state. We have to defeat the champions of deregulation. The place to begin is in the debate over the bailout, but this is a long political struggle."

You can read the whole thing here: http://dissentmagazine.org/online.php?id=148

Deregulation is the major cause of the current crisis."It would be nice, given that this is the foundation of his argument, if Walzer would explain precisely what specific acts of deregulation he has in mind. It would also be nice if he could cite some authorities or evidence for this proposition. Otherwise, it seems Prof. Walzer is simply calling for what he has always called for with the 'current crisis' as a handy prop. Now, granted even a broken clock is right twice a day, and so he may be right. But it would be far more reassuring if he gave any signs of expertise in the relevant disciplines (economics and finance).We have to take state power away from people who despise the state. We have to defeat the champions of deregulation. The place to begin is in the debate over the bailout, but this is a long political struggle.I supported the bailout, but it terrifies me to think that people like Walzer saw the bailout as a permanent restructuring of the political order in which bureaucrats and Congressmen will step in to manage our affairs going forward. To focus on the self-interest of market participants while ignoring completely the self-interest of politicians, lobbyists, and bureaucrats is a singularly naive and dangerous approach to political governance. I say this as someone who supports both healthcare reform, and higher levels of wealth distribution. I think these programs are a necessary part of providing for the common good. But I do not support them because of filial affection for 'the state'; I view the state as a necessary evil, and it is disturbing to me that distrust of the state is described above as a type of moral defect. Perhaps in practice Walzer and I would agree on a great deal; nevertheless, I find his affection and confidence for the state very troubling.

We have seen the abject and dismal failure of business management over the past few years in managing business and, hence, our affaire. John Henry worries about the ability of bureaucrats and members of Congress to do so.Who is left?

From a recent story in the Times, linked by Fr. Imbelli on the blog:

http://www.nytimes.com/2009/02/28/business/28nocera.html?pagewanted=2&8d... meant minimal capital requirements, which the banks all wanted so they could increase their leverage and buy yet more risk-free assets. This practice became especially rampant in Europe. That lack of capital is one of the reasons the European banks have been in such trouble since the crisis began.

I'm no expert on European financial regulation. Could you explain for me how Europe has been following a "laissez faire" ideology?