Monday, September 08, 2008
Japan's gridlock -- and the U.S. gets the disease
Wouldn't you know it! Last Friday, on the heels of the news that Japanese prime minister Fukuda was retiring, I did an editorial decrying the gridlock in Japanese politics and the fact that the cozy relationship between the government and big businesses leads to the "too big to fail" psychology when it would be a good idea to let some of those Japanese enterprises, especially a bank or two, fail. So over the weekend U.S. Treasury Secretary Henry Paulson demonstrates that the U.S. has the disease too, with the bailout of Fannie Mae and Freddie Mac. I'll have more on this as the week goes on and I have a chance to talk to a few more people, but it demonstrates just how socialized our economy has become, under both parties (remember Bush grew the government -- discretionary domestic spending, not just the war --faster than since the Great Society and maybe since the New Deal). The best bet now would be to break up these two mortgage buyers and fully privatize them, but the temptation of privatizing profits and socializing losses may still be just too tempting.