Walk Like a Dinosaur

Arnold Kling watches Elizabeth Warren discuss the TARP, the Panic of '08, and whether the crazed expenditure of hundreds of billions in bailout money actually accomplished anything. Elizabeth Warren

Note particularly at the very end, when she suggests that her gut feeling is that the "dinosaurs" helped by Paulson's bailout may not have been as critical to the economy as he assumed.

That is a big issue, in my opinion. And many Progressives (not all, as Warren illustrates) seem to want to side with Paulson, and especially with Ben Bernanke, in deciding to save the dinosaurs. I wish we could have a clean, nonideological way of answering that question

Something we have all forgotten, although it seemed like a Big Deal at the time, was that speech Nancy Pelosi gave right before the first TARP vote. She excoriated Republicans, "deregulation," and other bugaboos and then ... led the vote to keep funding the deregulated "dinosaurs" that had caused the mess in the first place, while the GOP voted, effectively, to allow the dinosaurs to succeed or fail on their own. TARP was passed with large majorities of liberals and progressives and bare handfuls of GOP members. If the GOP wanted to make sure the world was safe for rapacious dino banks, wouldn't they have voted to keep them alive? Similarly, if the Dems were really interested in reversing what they claimed to view as a free market gone mad, why would they vote to save them with a highly unpopular $700 billion bailout?

The sad truth is that the welfare state needs highly leveraged, illusory growth a lot more than the free market does. The Dems' anti-business/anti-Wall Street schtick is just that - schtick.