Rivlin: Capitalism Is Like a 'Machine Gun, Nuke Reactor'
A hearing before Rep. Barney Frank's (D-Mass.) House Financial Services committee is underway and it will be a start to what could be massive overhauling of government regulation of the crashing financial services sector. (See: Bear Stearns, Lehman Bros., etc. etc.)
Already, the "s-word," or "socialism," is floating around the room. For conservatives, more regulation means a slippery slope to socialism. For some liberals, well, that might not be so bad.
Witness Alice Rivlin, former director of the Congressional Budget Office (and a former director of The Washington Post Co.), just said: "Hardly anyone thinks we would be permanently better off if the government owned and operated financial institutions and decided how to allocate capital. But market capitalism is a dangerous tool. Like a machine gun or chainsaw or a nuclear reactor, it has to be inspected frequently to see that it is working properly and used with caution according to carefully thought out rules."
Here's a copy of her testimony.
Rep. Spencer Bachus (R-Ala.) is giving a stern lecture on "living responsibly," saying that Americans have been encouraged to spend, spend, spend when they should been encouraged to save, save, save.
"How do we encourage people to save? How do we encourage people to live within their means? How do we encourage governments to live within their means?" Bachus asked, perhaps rhetorically.
He continued, hammering on lenders who've given cut-rate loans to risky customers: "The best way to discourage people from making bad loans is to make them eat those loans," Bachus said.
-- Frank Ahrens
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