The GOP's Beck vs. Becker problem
One of the main dillemas facing Republicans is that its looney pundit class
is dominating its more sane intellectual class.
... I'll leave it to others to grapple with Glenn Beck's unverified reports that the Obama administration is secretly constructing concentration camps. Hub Blog is more interested in what Gary Becker thinks. The Nobel-winning economist rolls out the standard arguments about the standard righty villains, i.e. CRA and Fannie Mae, etc. But implicit in his blame-government argument is that government does have a big non-laissez-faire role in the economy. That's what so many on the right, especially the sophomoric Ayn Rand types, can't get their minds around. For example:
To deal with the "too big to fail" problem in the long run, Mr. Becker suggests increasing capital requirements for financial institutions, as the size of the institution increases, "so they can't have [so] much leverage." This, he says, "will discourage banks from getting so big" and "that's fine. That's what we want to do."
My problem with that approach is that once banks get too big, friendly administrations can always wave capital requirements, as the SEC infamously did earlier this decade. But at least Becker is intellectually mining in the right area. He'd also bolster his credibility if he explicitly acknowledged that, yes, given total regulatory freedom, free-market Wall Street is more than capable of screwing up the free-market system. ... Becker piece via Reader No. 1.Update
has more on the latest all-the-government's-fault-not AIG.