Words, words - pretty words. Somehow when the shift of power occurs all the pledges of goodwill fly out the window. When the Republicans took over the majority of the House and Senate in the 1994 mid-term election, the ironic sentiments were "come, let us reason together" and "pledges of bi-partisan support". References to FDR and The New Deal were bandied around like party favors. It was okay for the Republicans to be "big spirited" and "loving to the opposition" because it was okay to say those things - they were in power now and it was good to pretend there was unity everywhere.

The lofty ideals of the 104th Congress didn't last very long. By the end of 1995 the Government had ground to a halt. Newt Gingrich had quietly abandoned his pursuit of the 1996 Presidential race and government spending increased. The deregulation sped quickly - the fruits of those labors are haunting us today. Some legacies are just like the gift that keeps on giving.

And all those pretty words just ring forever . . .

"The greatest Democratic President of the 20th century, and in my judgement the greatest President of the 20th Century, said it right on March 4, 1933 when he stood in the braces at a time when a man who had polio . . .

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The Philadelphia Inquirer's been running a good series about the toothless, indifferent and possibly even criminally negligent EPA:

CHARLESTON, Tenn. - In January 2005, residents near the chlorine plant here discovered that it was the biggest mercury emitter in the state. Environmentalists warned them against eating fish from their beloved Hiwassee River.

They appealed to the plant's owners, Olin Corp., to do what 100 other chlorine producers had done: abandon a 19th-century process that emits tons of the dangerous neurotoxin. Olin refused.

In fall 2005, the Environmental Protection Agency weighed in - but not to take up the cause of residents.

Instead, EPA called Olin with an offer. Would the Charleston plant like to be enrolled in Performance Track, an elite green club of the nation's most environmentally progressive companies?

In return, Olin could expect regulatory breaks, such as fewer inspections and loosened requirements on hazardous waste disposal, not to mention positive publicity.

Sherry Neidich, who has lived half her life a mile downriver from Olin's plant, was stunned.

"The EPA is a toothless dog," she said. "What right does someone have to ruin my river? To poison our playground?"

Ah yes, the beloved Republican myth of self-regulating industries! So far, that's worked... where? And guess what the Inquirer found?

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As Barney Frank announces that he's pulled together a deal that will get the votes needed to pass through Congress, economists from some of the top schools in the country ask, "What's the hurry?": 

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers' expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

As the Wall Street meltdown causes John McCain to throw in the towel and George Bush attempts to pull off the biggest heist in history, it's becoming clear that pushing any bailout legislation too far, too fast, could be a total disaster for our country.  The Democrats need to listen to people who really know economics, keep a tight leash on Henry Paulson and Ben Bernanke, say no to Disaster Capitalism and take the time to get this right the first time. 

The list of economists who signed the letter is below the fold.

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