Nicole Gelinas is a senior fellow with the Manhattan Institute, which promotes ideas ?that foster greater economic choice and individual responsibility.?
So you might be surprised to learn that her recent book After The Fall: Saving Capitalism from Wall Street ? And Washington, offers a favorable review of increased regulation of the financial industry.
But statists have no reason to cheer Gelinas? recommendations. While many fans of free-market mechanisms might differ with Gelinas? specific policy prescriptions, most are likely to agree with the conclusions offered on the main text?s final page:
Despite elite concerns about a public backlash against capitalism, it has been the public, not Wall Street or Washington, that has supported capitalism all along. Financiers were disconcertingly quick to run straight into the government?s arms, while the public has stuck up for markets and fought against taxpayer subsidy of failure. The hope for free markets is ?political constraint,? says former St. Louis Fed president William Poole.
The public intuitively grasps unfairness when it sees it. In poll after poll, citizens have opposed bailout after bailout, not just for the banks but for their own neighbors. The opposition is not a reflection of heartless and mindless populism. Oridnary people understand that bailouts have perversely punished individuals and companies that acted responsibly, creating an incentive to act irresponsibly in the future. They can perceive the difference between a government that acts as an honest, transparent refereee of competitors and one that acts as a guarantor of perceived favorites.
What does Gelinas think of Barney Frank and Chris Dodd?s efforts to reform the financial industry? Not much.
