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Ross Douthat has a very strong column today arguing that the strange outcome of the manifold disasters in the public and private sphere has been more power accruing to those who contributed to the problem. The biggest banks are bigger now that the crisis is over than they were before it began. The nearly-successful terrorist attacks have given more power to the national-security state, while the BP oil spill is going to lead to more power for the regulators who didn't manage to stop it. The financial crisis is leading to a bill that strengthens the regulators who didn't stop it in the first place and the Eurozone's crisis is leading to an EU with more power over its individual members.

Douthat is right about this, but his final rhetorical flourish is unfortunately flip, and quite possibly wrong. These fixes, he says, "tend to make the system even more complex and centralized, and more vulnerable to the next national-security surprise, the next natural disaster, the next economic crisis." But when you drill down to the individual decisions, there's little evidence of that.

Does splitting the side of the Minerals Management Agency that raises money from oil companies from the side that regulates them really make the next spill more likely? That seems unlikely. Does giving regulators more power and tools to dissolve large banks really make us more vulnerable to the next economic crisis that forces us to dissolve large banks? I don't think that stands up.

But Douthat doesn't get into specifics here. Instead, he uses a rhetorical move that I've noticed fairly frequently among conservative commentators sympathetic to Obama's agenda but discomfited by the growth in government. "Taken case by case," Douthat writes, "many of these policy choices are perfectly defensible." Or, to put it in David Brooks's words, "Each of these projects may have been defensible in isolation, but in combination they created the impression of a federal onslaught." Taken case-by-case, those lines may be perfectly defensible. But together, I think you're seeing something less defensible.

It's a sentence that absolves the writer of having to say what he or she would've done differently, which makes broad-brush criticism a lot easier. "Centralization" sounds like a bad thing, and maybe it is. So does a "federal onslaught." But maybe not! Just as these decisions were made on a case-by-case basis, they have to be critiqued on one, too. But the case for government, and for things such as letting big banks purchase failing banks, looks a lot stronger when it's examined on a case-by-case basis than when it's viewed in general terms. So there's a preference to move toward the general rather than say how you'd handle financial crises or offshore oil drilling or terrorism in a way that didn't empower the government.

By Ezra Klein  |  May 17, 2010; 4:00 PM ET
 
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Comments

In other words, Douthat wants to do nothing.

He failed to mention the failures of efficient markets or self-correcting industries that is really the prime reason for all the recent problems.

I disagree with him that by fixing the regulators (instead of letting the relevant industry manipulate or control the regulators) we are centralizing or empowering that which failed.

Posted by: Lomillialor | May 17, 2010 4:27 PM | Report abuse

Maybe, Lomillialor. Or maybe he wants to do nothing without admitting that he wants to do nothing.

What Brooks and Douthat are saying, effectively, is, "I can no longer defend my predispositions by referring to any actual policy proposals on the issues facing the country. But I can express discomfort with the fact that reality is impinging upon my ideology. That is certainly very troubling for the American people."

Posted by: eelvisberg | May 17, 2010 4:42 PM | Report abuse

The "strange outcome of the manifold disasters in the public and private sphere has been more power accruing to those who contributed to the problem." True: Larry Summers does have more power now, as does the Federal Reserve, Barney Frank, and the Progressive Faction.

The so-called fixes do "tend to make the system even more complex and centralized, and more vulnerable to the next national-security surprise, the next natural disaster, the next economic crisis." Centralization IS a bad thing. Examples are so numerous and so common that many writers may feel foolish for attempting to list a smattering of them. The clearest, most concise description I've seen came from the American Library Association in its amicus brief regarding the Google Book litigation, in which one party favors efficiency while the other favors robustness. The Bank of England discussion cited earlier today also offers some examples.

Posted by: rmgregory | May 17, 2010 5:08 PM | Report abuse

"Just as these decisions were made on a case-by-case basis, they have to be critiqued on one, too. ... So there's a preference to move toward the general rather than say how you'd handle financial crises or offshore oil drilling or terrorism in a way that didn't empower the government."

The problem is that the current universal law of epistemic closure on the right dictates that if any conservative comes right out and concedes that certain government actions were appropriate (like Senator Bennett on TARP and David Frum on HCR) they'll end up with their playground priveleges revoked by the right wing (like Bennett and Frum).

Posted by: Patrick_M | May 17, 2010 5:34 PM | Report abuse

It's also worth noting that Douthat misdiagnoses the cause of the European economic crisis. It was not the Eurocrats in Brussels that promised outrageous benefits and failed to collect any kind of taxes to pay for it in Greece. Expanding fiscal control is the only thing that makes sense if europeans want the benefits of a common currency- which was working pretty well until recently.

Posted by: Owen_Truesdell | May 17, 2010 5:36 PM | Report abuse

"Centralization" sounds like a bad thing, and maybe it is." -- Often it's far more efficient than fragmentation. Ever heard of economies of scale? economies of simplicity? duplication of effort?

As much as the Republicans want to move us back to 1810 (the good old days of small government, rampant poverty, and an average lifespan in the 30s), if we want to live in a modern wealthy way, with lifespans more than twice as long, then that requires an economy a lot more complicated, and a government a lot larger and more complicated, to achieve efficiently.

Posted by: RichardHSerlin | May 17, 2010 5:43 PM | Report abuse

I do not thing Douthat is saying do nothing. He implies 'how come more centralization' is going to solve the issue; solution could be thinking out of box and not succumbing to 'half measures'.

For one thing - more power to Fed, we all know is not going to stop the next bubble. How is that more stringent regulation is going to solve the next oil spill issue when Obama Admin does not have 'guts' to take us beyond 'Hydro-Carbon' based Economy?

Indeed the only successful example where 'more regulation' has arguable saved us is Nuclear Regulatory Commission. But then, other things like industry turned shy, insurances increased and public became unenthusiastic.

Apart from that Douthat seems right.

What Ezra needs to do - keeping point where the proposed FinReg is failing. It seems it is at the most 'half' where it needs to be eventually. At some point, passing this half measures because status quo is not sufficient and may not run any further with Public. (Case in point HCR costs - Ezra is steadily loosing that argument & numbers there, based on so many further disclosures by CBO and even by IMF as well.)

Posted by: umesh409 | May 17, 2010 7:37 PM | Report abuse

Why is okay to have banks too big to fail, but not government big enough to correct and prevent further financials disasters?

Ditto Big Oil.

The goal of a constitutional system such as ours is to provide necessary government to make up for what the marketplace or society cannot or will not provide in terms of fairness and justice. Play fair and you are free to reap whatever just rewards you can earn.

By that standard conservatives have failed miserably of late.

Posted by: tomcammarata | May 17, 2010 8:51 PM | Report abuse

umesh, if Douthat is objecting to half-measures, then he has flip-flopped, because only recently he was making the case for incremental health care reform instead of comprehensive reform.

Posted by: Lomillialor | May 17, 2010 10:34 PM | Report abuse

Ezra,

An example you're very familiar with where centralization is far more efficient and better than fragmentation is with single payer health insurance.

The economies of scale and economies of simplicity are enormous. In addition, monitoring and holding accountable one large unit is cheaper and easier, and there's a great deal of duplication of effort eliminated.

This is a big reason why single payer countries can deliver health care as good as, or better, than the U.S. at half the cost, or less. But note that these cost estimates are only on the producer side. They don't include the great economies of simplicity and convenience savings to consumers. They don't count the hours consumers waste learning their health insurance rules and forms, and which providers they may use in network, not being able to email their doctor because in a fragmented system this is too hard to monitor and bill for each little fragmented carrier, and so on.

Posted by: RichardHSerlin | May 17, 2010 11:12 PM | Report abuse

It wasn't a strong column. It was lame, content-free complaining about how bad things are nowadays, without any context or explanation as to how or why they got this way, and no substantive idea as to what would be a better way forward for any of the problems cited.

Even worse, in some cases he implies that the best way forward would be to try less hard to stop future problems from developing. Lame.

Posted by: StevenDS | May 18, 2010 8:32 PM | Report abuse

umm....Ezra there is an excellent description of what Douthat is spewing from Stephenson's Anathem....
its bulshytt.
Bulshytt: Speech (typically but not necessarily commercial or political) that employs euphemism, convenient vagueness, numbing repetition, and other such rhetorical subterfuges to create the impression that something has been said.

Posted by: quell | May 18, 2010 10:41 PM | Report abuse

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