Thanks for the sharp analysis, EJ, which has made me reconsider several of the articles I've read about the Scott Brown election.

You raise one point here which I am very, honestly, curious about. I am not disputing your analysis -- I think it is very clearly true and supported by long history -- I'm just wondering why this happens:

Quote Originally Posted by EJ View Post
But they blame the bankers less for buying the favors than they do the politicians for selling them. As many Democrats and Republicans swam in that sewer.
Why do Americans "blame bankers" [or XXX industry] "less for buying the favors than they do the politicians for selling them". I mean, has it not penetrated the collective consciousness by now that the bankers -- [or whatever industry, pretty much all large corporations do this in their own respective fields]... the bankers:

  • First, they buy off the politicians with campaign contributions and other favors. In fact, the oft-mentioned "revolving door" makes it difficult to even draw the line between politicians and the industries they oversee in this country, as noted by the lengthy list of highly placed "ex"-bankers advising the Obama administration on banking reform.
  • Second, they draft the favorable legislation and loopholes themselves.
  • As a final step, they accept the favors and loopholes which they have designed and in most cases the politicians have rubber-stamped, verbatim.

This is the common ingredient in scandal after scandal, not just finance scandals. Doesn't the fact that "As many Democrats and Republicans swam in that sewer" suggest that the common element is not government, but something outside it?

To me, the attitude of blaming bankers less than government seems rather like, suing the police for failing to prevent a robbery while waving away the actual robber scott-free. Suing the doctor for failing to stitch you up properly, while testifying in favor of paroling the mugger who actually stabbed you. If that happens in any other context, the same people would say that it was a ridiculous example of the need for tort reform. Whether a regulator falls down on the job or actively betrays you, it nevertheless seems to me like the regulated party is clearly the instigator. The situation wouldn't have happened if it were somehow just the regulator alone.

But it's a chicken-and-egg question, I'll admit. Mainly due to the "revolving door".

In any case it seems to me like part of the solution is to get better police and doctors, not to drown the doctors in a bathtub.

My own speculation: perhaps part of the problem is the fact that Americans have come to see Government as an alien, impenetrable, inscrutable entity which they have no hope of influencing. (Probably with good historical reasons --) But we live in a Democracy, at least in theory; if this is the case, we need to fix it, not simply reject all government. At least in theory, we are the government and the government is us; it should be accountable. Americans can't have forgotten this, it's the supposed justification why our troops are in hundreds of countries -- to promote democracy, accountability, and self-rule against its adversaries. If government is always the enemy and always intrusive and oppressive, then why are we sending our sons and daughters to bleed out on the sand for it in foreign countries that don't want it from us anyway?

(Please spare me the Winston Churchill quip; a pithy witticism doesn't explain our zeal and enthusiasm spending trillions of dollars and thousands of lives to do this.)

Then again, most Americans, working in a business, probably believe that businesses are more accountable than government; (probably with much less historical reason!!) But the only way to hold a business accountable is very indirectly, through the market, and the message is often inscrutable... If AIG's derivatives sales slip, is it because The People have decided that derivatives themselves are unsafe, or AIG is badly managed, or is it because Goldman is selling better derivatives, or because the market is saturated? Or because AIG's latest ad campaign sucks rotten eggs? One of the strengths of iTulip is that it analyzes broad cross-market trends, but surely it's obvious that analyzing an individual company's sales is much of the time like reading tea leaves. The company's management can pull whatever illusions that they want to see, out of the sales figures. Themed boycotts rarely hold up more than a couple months, and rarely cost a business more than a few marginal points. I find it ridiculous to imagine citizens can send messages to businesses or hold them accountable in any clear manner by means of the market, in most cases. Why do people believe that businesses are more accountable than government?

Lastly, there is an element of Upton Sinclair involved: "It is difficult to get a man to understand something when his salary depends on him not understanding it." I think collectively people are less afraid of government than they are afraid of the possibility of losing their livelihoods, so they attack government rather than undertake the harder and more personally risky task of reforming whatever industry is under discussion. But that doesn't make the reform of the particular industry any less necessary or important; and after awhile, the un-addressed problems with the industry tend to fester.

So who wants to speculate? Who wants to explain it to me?