Tuesday, Sept. 30, 2008 | 2:03 a.m.
Whether we get a bailout plan or not, it is clear that we need to know just how this disaster came about. The basic philosophy of Republicans since the Reagan administration has been to deregulate business. As pointed out in Sunday’s Las Vegas Sun article “Nevadans of both parties voted to relax controls over finance,” both Republicans and Democrats have been involved in this fiasco.
We have had plenty of examples of how deregulation works. Over the past 10 to 20 years, taxpayers had to jump in to deal with a number of large companies that were considered too large to fail. Now we are getting ready to lend or give our automakers $25 billion of taxpayer funds and possibly another $700 billion to save our financial system.
Deregulation is the culprit. The free market loves it and the taxpayers inevitably end up paying for it, whether we are talking about the savings and loan fiasco or the present one. I think most businesses follow the rules. But there are some that, when granted the privilege of voluntarily regulating themselves, simply will not do so. There are always some of them that intentionally don’t worry about rules when there is the possibility of great profits.
As for reforming the system, John McCain has been for deregulation from the time he first entered Congress. He was heavily involved in the savings and loan fiasco, seeking to interfere with regulators who were trying to get a handle on Charles Keating.
We need a fresh look. Republicans and Democrats who have participated in the deregulation endeavor share the blame. But the primary villains are those investment banks, commercial banks and insurance companies that certainly had the smarts to know better.
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