Simon sez II

Looks like Simon Johnson is on a mission.

AUL sent me Johnson's article from the Atlantic, The Quiet Coup, where he describes our government's increasing subservience to the financial industry.

I like this bit where he sweeps aside political finger pointing and focuses on the common thread of economic policy in the past few decades (emphasis mine):

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside. 

This was beyond conservative or liberal - this was about keeping the money train rolling.

We think we're special - that our crisis is unique - and Simon patiently shows us that the IMF has seen our kind of foolishness before.  And they handled it by making the financial types share in the pain.

Worth a read.