The New York Times Op-Ed pages just teems with bullshit sociology on a nearly daily basis -- usually Brooks and Friedman take the lead oar on the good ship B.S., but Ross Douthat joins in today asserting the claim that the recent collapse of MF Global, under the leadership of Jon Corzine, is emblematic of the recklessness of our new meritocratic elite. The old WASP elite never would have given us this sort of thing, according to Douthat, because basically they were too stupid to do the math behind exotic financial instruments. Has Ross never heard of the 1929 crash? The Panic of 1873? The Panic of 1893? 1907?
These kinds of events have occurred throughout U.S. history, regardless of the nature of the financial elite. Hubris is not a new phenomenon, nor is greed. The United States was rocked by periodic financial crises and panics throughout its first hundred and fifty or so years, often with devastating impact on the broader economy. During the period from the New Deal into the 1980s, heavy regulation of the banking and financial sectors basically averted these kinds of problems. As the deregulation ethos took hold starting with the Reagan Administration, we have been plagued by serial problems of this kind starting with the savings & loan crisis on through to the present moment. I would submit that that this is not due to any change in human nature nor by the changes in the makeup of the Wall Street elite. Rather, it is a direct result of public policy choices favoring a much more unfettered form of finance capitalism than was permitted in the decades following the Great Crash.
Douthat concludes by trying to make the case that what is needed is neither the arrogant certainty of the meritocrats, nor the ignorant certainties of the know-nothings of the Republican Party, but "intelligent leaders with a sense of their own limits" -- so why isn't he backing Obama's re-election?
