Obama's Shell Game of "Financial Reform"

Here is a bit from Paul Krugman's latest NY Times op-ed:

So here’s the situation. We’ve been through the second-worst financial crisis in the history of the world, and we’ve barely begun to recover: 29 million Americans either can’t find jobs or can’t find full-time work. Yet all momentum for serious banking reform has been lost. The question now seems to be whether we’ll get a watered-down bill or no bill at all. And I hate to say this, but the second option is starting to look preferable.

...

Many opponents of the House version of banking reform present their position as one of principle. House Republicans, offering their alternative proposal, claimed that they would end banking excesses by introducing “market discipline” — basically, by promising not to rescue banks in the future.

But that’s a fantasy. For one thing, governments always, when push comes to shove, end up rescuing key financial institutions in a crisis. And more broadly, relying on the magic of the market to keep banks safe has always been a path to disaster. Even Adam Smith knew that: he may have been the father of free-market economics, but he argued that bank regulation was as necessary as fire codes on urban buildings, and called for a ban on high-risk, high-interest lending, the 18th-century version of subprime. And the lesson has been confirmed again and again, from the Panic of 1873 to Iceland today.

It is pathetic that the American public lets the Republicans play their ideological games. These games led to Reagan and his "deregulation" revolution. It led to Bush with his give-away tax cuts to the super-rich and an unnecessary war topped off with the financial crisis that has created the Great Recession. Seems to me that should be enough to "wake up" Americans to the folly of Republican ideology. But apparantly it isn't. The fanaticism runs deep. The true believers are rabidly anti-government (and consequently pro-financial panics and depressions). Sad.