For the second straight day, the New York Times runs an op-ed by a wealthy Obama fundraiser who profits from big government calling for more big government. Yesterday it was former Obama economic advisor Warren Buffett. Today it’s former Obama car czar Steve Rattner.
My brother John Carney at CNBC’s NetNet picks apart Rattner’s op-ed pretty well. (“There is no analysis of the Republican positions. In the place of analysis there is the repeated assertion that the positions would lead to economic ruin.”)
John and blogger Ira Stoll both note Rattner’s naked, unbacked assertion that without TARP “we would not have a functioning economy today.”
Not only does Rattner offer no evidence for this counterfactual, it’s not even clear what he means. What would the U.S. look like with no “functioning economy”? Would I not be able to trade my dollars for a loaf of bread? Would every bank in America be gone, with none replacing them?
It reminds me of the terror stories Ben Bernanke and Hank Paulson were telling congressmen during the TARP debate. The two were basically promising cannibalism if we didn’t do the bailout. This is an object of faith among much of the center-left and center-right: without Bernanke, Paulson, and Geithner, we’d all be destitute.
In addition to being unprovable, this line of
assertion always has an unstated premise that opposing TARP meant opposing all government action. We could have wound down struggling financial institutions through managed bankruptcy. Instead, we saved the banks and made billions for Obama fundraisers like Warren Buffett.
Rattner’s piece should be read as a case study in blindered center-left economic orthodoxy. Stoll provides a nice kicker to his blog post:
