. . . my take on this will make David Broder cry: The liberals were right. Not the Democrats. The liberals. They were right that deregulation had gone too far. They were right when they spent the last few years offering unpopular predictions that the Housing Bubble would pop. They were right that a liquidity problem had become a solvency problem. They were right that government intervention on a massive scale was needed to stabilize the capitalist system. They were so right, in fact, that Hank Paulson and George W. Bush couldn't hold the line, and will now sign into law the most profoundly socialist measure this country has seen since the 1930s.
I make this point not to wrap myself in a warm blanket of Schadenfreude -- there's little joy in seeing your allies proven perspicacious by a catastrophe -- but because it's actually important. The liberal understanding of the economy and its problems has been, in recent months and years, superior to the conservative understanding of the country and its problems. And this has only sharpened in recent weeks, as the Republican Party has spun off into the Gamma Quadrant with laughable theories about ACORN and Fannie Mae and Freddie Mac and the Community Reinvestment Act of 1977. Their argument isn't wrong in the sense that it's a serious engagement with the situation that happens to be less empirically sound than competing theories. It's just nonsense. And this isn't a time when we can afford governance powered by nonsense. We need governance by people who understood the magnitude and nature of the problem, and have some idea how to go forward fixing it.
Tuesday, October 14, 2008
Ezra Klein on the latest bailout: