Answering Rattner

http://www.futureofcapitalism.com/2011/08/answering-rattner

Steven Rattner has a piece on the New York Times op-ed page criticizing what he says are the radical and extreme economic policies of the Republican presidential candidates.

He writes:

Take the agreement to avert a disastrous default by cutting at least $2.1 trillion from the deficit over the next decade. Mitt Romney, Michele Bachmann and Ron Paul all opposed it. Only Jon M. Huntsman Jr. (whose poll numbers — perhaps not coincidentally — are in the single digits) supported it.

By this measure, Mr. Rattner's pal Michael Bloomberg is also radical and extreme — the mayor published an editorial denouncing the agreement as "an alarming bipartisan mess" and warning, "the deal provides far too little future deficit reduction to put the government's finances on a sustainable path."

More from Mr. Rattner:

these are only the best-known of this crowd's extreme views. In an unpublished interview, Gov. Rick Perry of Texas told Fortune magazine that if he had been president in 2008, he wouldn't have engaged in the financial rescue effort. Without the bailout, initiated by the Bush administration, we would not have a functioning economy today.

Mr. Rattner's breathless reference to an "unpublished interview" is comical. Mr. Perry hasn't made any secret of his opposition to TARP; in fact, he published a book, reviewed here, that called the seizure of Fannie Mae and Freddie Mac in September 2008, along with the Troubled Asset Relief Program signed into law in October 2008, "the culmination of the statist's dream — the literal upending of a unique American way of doing things that had been defined by self-reliance, hard work, faith, a belief in private charity not government, and, perhaps most of all, a devotion to free markets."

As for Mr. Rattner's claim that without TARP, "we would not have a functioning economy today," Eugene Fama calls it "the experiment we never ran." I don't see how he can know that.

Mr. Rattner writes, "Eliminating our central bank is a crazy idea that would plunge the country back into an oscillating 19th-century world of panics and busts." Yeah, not like we have any panics or busts now. In fact we had the Federal Reserve during both the Great Depression and the 2008-2009 financial crisis.

At the end of the article, the Times describes Mr. Rattner as "a Wall Street executive and a former Treasury official in the Obama administration." Mr. Rattner agreed in November 2010 to a two-year ban on associating with any investment adviser or broker dealer, so it's not clear to me why the "former" applies only to the Treasury official part and not to the Wall Street executive part.

by Ira Stoll  |  Aug 16, 2011 at 12:03 pm Related Topics:  Steven Rattner receive the latest by email: subscribe to the free futureofcapitalism.com mailing list