Comment 12 to Friedman's Article

David Brooks quotes David Smick arguing that it will take a “global leadership class that can answer essential questions: How much leverage should be allowed?” Almost true, except that the question of how much leverage should be allowed had already been answered, decades ago. The Bush administration then decided that any regulatory obstacles to unfettered greed were harmful to the economy and bent all the reserve requirements. This allowed already leveraged investments to be used as collateral on further investments, fostering unlimited leveraging.It wasn’t until quite recently that “Central bankers and Treasury officials … pretend they’re coming up with policy responses, but much of what they do is political theater.” When political hacks have been appointed to all of the regulatory positions, you can’t really expect any other results. It’s right out of Karl Rove’s playbook. You could as easily have been describing Sarah Palin’s debate performance. It’s part of the hollowing out of government that Republicans have been working on for years.
— Steve, Japan