Even Frank Rich Sorta Gets It

While Krugman kind of wienies out.

What Happened to Change We Can Believe In?

By FRANK RICH, The New York Times

Published: October 23, 2010

No matter how much Obama talks about his “tough” new financial regulatory reforms or offers rote condemnations of Wall Street greed, few believe there’s been real change. That’s not just because so many have lost their jobs, their savings and their homes. It’s also because so many know that the loftiest perpetrators of this national devastation got get-out-of-jail-free cards, that too-big-to-fail banks have grown bigger and that the rich are still the only Americans getting richer.

This intractable status quo is being rubbed in our faces daily during the pre-election sprint by revelations of the latest banking industry outrage, its disregard for the rule of law as it cut every corner to process an avalanche of foreclosures. Clearly, these financial institutions have learned nothing in the few years since their contempt for fiscal and legal niceties led them to peddle these predatory mortgages (and the reckless financial “products” concocted from them) in the first place. And why should they have learned anything? They’ve often been rewarded, not punished, for bad behavior.

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The real tragedy here, though, is not whatever happens in midterm elections. It’s the long-term prognosis for America. The obscene income inequality bequeathed by the three-decade rise of the financial industry has societal consequences graver than even the fundamental economic unfairness. When we reward financial engineers infinitely more than actual engineers, we “lure our most talented graduates to the largely unproductive chase” for Wall Street riches, as the economist Robert H. Frank wrote in The Times last weekend. Worse, Frank added, the continued squeeze on the middle class leads to a wholesale decline in the quality of American life – from more bankruptcy filings and divorces to a collapse in public services, whether road repair or education, that taxpayers will no longer support.

This is the real “moral hazard”.  Krugman misses the point-

Falling Into the Chasm

By PAUL KRUGMAN, The New York Times

Published: October 24, 2010

If Democrats do as badly as expected in next week’s elections, pundits will rush to interpret the results as a referendum on ideology. President Obama moved too far to the left, most will say, even though his actual program – a health care plan very similar to past Republican proposals, a fiscal stimulus that consisted mainly of tax cuts, help for the unemployed and aid to hard-pressed states – was more conservative than his election platform.

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What we do know is that the inadequacy of the stimulus has been a political catastrophe. Yes, things are better than they would have been without the American Recovery and Reinvestment Act: the unemployment rate would probably be close to 12 percent right now if the administration hadn’t passed its plan. But voters respond to facts, not counterfactuals, and the perception is that the administration’s policies have failed.

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Is there any hope for a better outcome? Maybe, just maybe, voters will have second thoughts about handing power back to the people who got us into this mess, and a weaker-than-expected Republican showing at the polls will give Mr. Obama a second chance to turn the economy around.

So more “but the Republicans are worse” Obama/DNC bullshit.  How motivating.

What evidence is there that, without holding Democrats accountable, their policies will change?

None.  Zip.  Zilch.  Nada.  Zero.

What about those “negative consequences” from Democratic losses?

• Fear Factor
• Fear Factor II

With about a week to go before Election Day, what signs do you see that Democrats or Barack Hussein Obama and his Administration intend to implement policies any different at all from the Bush Lite ones they tried in the last 2 years that have already failed?