Amid all the (Democratic) clamor about “need more regulation”, MIchael Barone points out that the new Geithner Obama plan relies on unregulated institutions to bail out those that are most regulated.
But I have noticed what I think is a paradox in the Geithner plan. He is asking the most unregulated parts of the financial system—hedge funds, private equity firms—to bail out the most regulated part of the financial system—the banks. With government help, or subsidy, of course. But of course the government isn’t really regulated either, is it? Except, I suppose, through the political process.
Why? Well, the unregulated parts are doing just fine. Just like those that were prudent are doing fine. Both have to be raped to get the votes of the imprudent (people or businesses).