AGAINST ALL GOVERNMENT! | Center Left Nation

“Hands off our freedom to let our houses burn down!”

Tea Partiers, and many other Americans even on the left, have a real problem with the TARP bailout that George W. handed out at the end of his presidency to the financial institutions. It’s just so simple to say that if a bank is in trouble just let it fail, as Senate Majority Leader Mitch McConnell, asserts. That would feel good, and it does sound like common sense. Right?

Paul Krugman explains why that is a really, really bad idea. He likens McConnell’s stand against financial reform to calling for the “abolition of municipal fire departments.”

Standing aside and allowing banks to fail and the free market “work its magic” is a policy that America tried in the 1930’s; and we tried it again when the Bush administration let Lehman Brothers go down. Immediately the stock market plunged and another Great Depression loomed. When a large building is on fire the damage needs to be contained because fire spreads, and spreads quickly.

“So it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires,” Krugman tells us. And he explains why the Republican financial regulatory policy of: “We won’t solve this problem until the biggest buildings are allowed to burn” can only lead to burning down our entire economy. Check it out here.

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