The Strib put side by side today two opinion pieces the placement of which, I assume, was not coincidental. If it was coincidental, I hope the paper is smart enough not to cop to it. It was a beautiful little piece of irony. One, by E.J. Dionne, rails against the excesses of capitalism. The other, by Margo Thorning, rails against the excesses of regulation. Probably worth reading. More important, it provides a wonderful side-by-side comparison of two very different political philosophies. In the interest of full disclosure up front I loathe Ms. Thorning’s organization (more below) and all it stands for. At the same time, E.J. Dionne’s apparently unlimited supply of blood – he bleeds for everyone, everywhere – and generally poor grasp of economics annoys the shit out of me (I think he gets it more or less right in the piece referred to here…which makes me take a long, hard look at my own belief system ‘cause, really, the guy blows).

With the fall of Bear, Stearns and the government bailout via the subsidized buyout of Bear by Morgan, we see the logical conclusion of the deregulation fever that started in the late 70’s. That is, the ever decreasing regulation of capital markets in particular (and everything in general) leading to an outcome that we’ve seen before…in the late 1920’s and 30’s, and the various and several recessions/depressions that preceded the big magilla. Capitalism, with too much freedom, will drive itself off a cliff. Does it every time. The great capitalist voice, Adam Smith (hell of a guy, hell of a philosophy, hellaciously misunderstood by his proponents today), knew that markets have to have rules. Rules are also known by a less popular name…regulations.

There’s a great deal of teeth gnashing from the left on the unfairness of the current Fed bailout of the banking industry, particularly when compared to the egregious 2005 bankruptcy bill that yanked a safety net out from under millions of people, to the advantage of the banking industry. The general overview of that bill is that financial services companies leveraged their impressive access to legislators to create a law that insulated them against their bad bets…namely, extending credit to the uncreditworthy. It was, until that law, way too easy to declare bankruptcy and an awful lot of regular folks took advantage. Tightening up on bankruptcy requirements wasn’t the problem with the bill. The problem was the one-size fits all nature of it in which there was no consideration given to people who were unable to pay their debts due to medical catastrophe, service in the military reserve (don’t question the war in Iraq, refer to all service people as heroes, and then fuck ‘em every chance you get) and a plethora of other unforeseen emergencies for which the idea of bankruptcy protection exists in the first place. The general consensus amongst the lefties is that it is unfair to bailout wealthy investment banks when hammering the regular person. And they’re right…sorta.

I agree with the principle but it doesn’t change the fact that if I personally fail financially it has zero widespread impact whereas if Bear (or Lehman or any of the others) fails it sets off a domino of failures among smaller banks that do business with the big guys, thus leading to a collapse, whole or partial, of the financial system. Which is, you know, a bad thing. And which will impact all of us. So, for that reason, to hell with principle…bail the big banks out. I am of the opinion that the Fed is doing the right thing by providing a backstop. I don’t know what the government could do different at this point in time.

It could and should do a whole lot different going forward.

This current crisis is due, as mentioned earlier, to the anti-regulatory zealotry that flowered in the era of Ronnie Ray-gun and took hold across a broad spectrum of the population (i.e. voters) such that we now don’t tax or regulate anything if someone starts screaming about impediments to capital growth or, better for the news headlines, costing jobs. The basic premise that regulation inhibits growth is absolutely, undeniably correct. Always has, always will. Regulation isn’t meant to spur growth. It’s meant to mitigate risk whether it’s financial risk, health risk, whatever, that the actions of a few can inflict on the many. This is the way of capitalism…capitalism wants to grow like crazy and pursue high-risk/high-reward courses. Regulation wants to ensure a level playing field and mitigate risk, sometimes personal, sometimes societal. And, yeah…sometimes regulation fucks up and either doesn’t solve or even somewhat address the underlying issue or goes to such an extreme that its costs far outweigh the benefits. This is not, as the Right would tell you, an argument against regulation. It is an argument for better regulation with well-defined goals and a system to measure its effectiveness in meeting those goals. The Right’s argument against any and all regulation begins with the premise that government is inefficient…an accurate statement in any democracy. Democracy is the single least efficient form of government known to man. It’s slow, it’s cumbersome, it requires compromise…it’s messy. It is, however (compared to its alternatives), equitable. It says, “Yo, powerful dude…you can go wield your power but your vote don’t count for anymore than that little meek dude over yonder. As a result, a bunch of little meek dudes have gotten together and decided to hit you with some parameters you have to work within.”

What the Right has done very effectively is taken the statement “government is inefficient” and sidled over to “regulation is inefficient” followed by a big ol’ hop to “regulation is bad” followed by a quantum leap to “government is bad”…which is fucking stupid. Government is not inherently bad. Bad government…government that lies to its people (Iraq) is bad. Government that does not listen to its people (wiretapping) is bad. Government that does not take care of its people due to poor systems, policies, and people to execute them (Katrina) is bad. Government – the government that provides schools, roads, defense, healthcare, infrastructure, and (goddammit) laws, the courts that oversee them, and the means to enforce them, is just fine by me. With the exception of Libertarians, I think we all like ‘em. For every Nanny State, over the top, regulation gone batshit, misdirection that the Grover Norquist camp pimps exhaustively to the press (and the fuckin’ Libertarians go goo-goo about) I’ll give you ten “no-shit” pieces of regulation (can’t dump shit into the water, can’t serve up as food sick ass cows, can’t open fire on a school bus, can’t drive so fast you endanger people, can’t pump the air full of poison, can’t build on your neighbors property, can’t build shit on your property that fucks up your neighbors, can’t beat up kids, can’t fuck ‘em, can’t lie to your shareholders) that we conveniently forget about when we say “regulation-bad”.

Which brings us to Ms. Thorning’s piece in the Strib. Ms. Thorning is, according to her column, “senior vice president and chief economist of the American Council for Capital Formation, whose stated mission is to promote procapital formation policies and sound, cost-effective regulatory policies.” Bear in mind that to the ACCF the only sound and cost-effective regulatory policy is no regulation. The ACCF is very, very good at putting out propaganda that sounds terribly reasonable, all of which has the goal of killing any and all proposed regulation. Apparently, the ACCF has set its sights on environmental regulation designed at addressing global warming. They are pissed off about the Climate Security Act being prepped for debate in the Senate. Ms. Thorning and I share a contempt for this little nugget of regulation. She because it does too much, I because it does very, very little.

The basic premise of the act is that it caps emissions of greenhouse gases caused by economic activity. I think it sets the cap too high (meaning the mandated decrease in emissions isn’t big enough). Ms. Thorning thinks the cap is too low (thus impeding growth, etc). Of course, the ACCF thinks any cap is bad. So, the target level (reducing the 2005 emissions by 63% by 2050) is irrelevant.

As the ACCF is very good at doing, the piece phrases this all in terms of what it will do to the middle-class and the poor…that there is an economic cost to capping emissions (regulation) and that it will decrease standards of living and (shudder) cost jobs.

Margo…hurricanes, rising sea levels, changes to the biosphere, and negative health impacts large and small of “emissions” (that means pollution in every day language) decreases standards of living and costs not just jobs but lives. Even if the endless recitation of numbers in the piece were accurate (they’re not) it wouldn’t matter. I’ll see your falling standard of living and job losses with my standard of living, job losses, and deaths.

The underlying motivation of the ACCF and all of its other pro-business to hell with regulation brethren, is that it wants to ensure that wherever possible its adherents can reap the full benefit (meaning all the money with as little taxation as possible) of its pursuits (like maybe the burning of coal) while simultaneously shifting the costs to the public (like, maybe, the increasing healthcare costs and environmental degradation associated with burning coal). This is precisely the same thing as the investment banking industry wanted…the ability to reap the full benefit of inventing and dealing in high risk financial instruments (like, maybe, subprime mortgages) while shifting the societal costs of doing so (the risk of failure that will have to be offset by tax dollars to keep the entire financial system from collapsing) to the public. Hey, capitalists are smart. For 30 years the greatest beneficiaries of our lack of financial regulation, investment bankers, have been granted more and more freedom to go wild while simultaneously being asked to pay less and less of the costs of the inevitable blow up in the form of taxes. Good work if you can get it. The issue to the rest of us is that as the tax policies of the anti-regulation crowd put an ever increasing burden on the middle and lower classes (the people least likely to be getting the big bucks from high risk financial games) the final bill falls due and, because of this tax structure, we pay a greater share of the final cost.

What the ACCF wants on environmental legislation is more of the same shit, different day. Or, more accurately, the same ridiculous policies (don’t tell the capitalists that they have to bear the costs of their pursuits in the form of risk mitigating regulation) applied to a different issue (environmental degradation). In any milieu, it’s crap.

We are seeing, in many different theatres, the impact of anti-regulation fever. The Fed’s actions in response to the piper’s demand to be paid in the form of bailing out the financial services industry is a good and appropriate use of government. However, it is incumbent upon us, the voters, to demand of our elected representatives that they stop hiding under the covers from the big bad regulatory boogie-man and begin to, finally, put in the oversight necessary of our largest industries to keep them, despite their petulant bitching, from driving themselves and the rest of us off that damn cliff.