What We Need To Do Is Give The Henhouse Back To The Foxes

Paul Krugman came out with a tour de force today, excoriating all of the Presidential candidates for failing to develop a serious policy for regulating the financial markets so that they never get so out of control again, threatening our economic stability. I don't know if Hillary Clinton's speech today was supposed to be a response, but if so she has quite a tin ear:

Democrat Hillary Rodham Clinton called on President Bush on Monday to appoint ''an emergency working group on foreclosures'' to recommend new ways to confront the nation's housing finance troubles.

The New York senator said the panel should be led by financial experts such as Robert Rubin, who was treasury secretary in her husband's administration, and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.

Such a panel would recommend legislation and other steps to ''help re-establish confidence in our economy,'' Clinton said in prepared remarks for a speech on the economy in Philadelphia. She and Sen. Barack Obama are campaigning heavily in Pennsylvania, which holds its presidential primary April 22.

Now, Clinton is talking about foreclosures, whereas Krugman was talking about regulating investment banks and what they did with packaging mortgages into securities. Connected, but not quite the same. The problem here is who she recommended to deal with the problem - the same figures who CREATED it! Alan Greenspan shouldn't be anywhere near the levers of power ever again. And Robert Rubin was heading up Citi during this whole mess, and somehow didn't get the memo that the housing market was in the midst of an historic bubble.

This should be newsworthy. Mr. Rubin is not only a former Treasury Secretary, he is in the top management at Citigroup and he is one of the top Democratic policy advisers. The failure to recognize the housing bubble and the danger it posed was an act of extraordinary negligence that would get people fired in most lines of work. The fact that he still doesn't recognize the enormity of this oversight even after the fact (economists did recognize the housing bubble and the dangers its collapse would pose to the financial system) is remarkable.

We're going to put HIM in charge of fixing things?

I don't know that Obama would have come up with any better names. And McCain doesn't remember any. So we're, in short, screwed, by the endless recycling of elite know-nothings who continue to get things wrong and are never held to account. This is a DC establishment problem at the root.

UPDATE: Obama's campaign responds by claiming he called for just such a panel a year ago, and that "One key difference, however, is the diversity and representation that Obama called for – not just some of the same people who helped to create these problems or have a direct financial industry stake in the outcome." Points for awareness.