Krugman lays out what should be obvious: the Bush administration’s new proposal for financial reform is utter bullshit. To reverse course now, and seek expanded regulation, the administration would have to back down on its free-market ideology — and it would also have to face up to the fact that it was wrong. And this administration never, ever, admits that it made a mistake. Thus, in a draft of a speech to be delivered on Monday, Henry Paulson, the Treasury secretary, declares, “I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil.” And sure enough, according to the executive summary of the new administration plan, regulation will be limited to institutions that receive explicit federal guarantees — that is, institutions that are already regulated, and have not been the source of today’s problems. As for the rest, it blithely declares that “market discipline is the most effective tool to limit systemic risk.” Good thing McCain's people understand how to right the ship ….
Adam Doster, a contributing editor at In These Times, is a Chicago-based freelance writer and former reporter-blogger for Progress Illinois.