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Wednesday, October 29, 2008

Government banking

Barry Goldwater, in his famous 1964 convention speech, said it is "the cause of Republicanism to resist concentrations of power, private or public." (Note the inclusion of "private," which suggests that Goldwater was not as far removed from the Theodore Roosevelt/John McCain tradition as some believe.)

Fast forward to the present: a tremendous concentration of power has emerged in the banking sector, now that government is a shareholder in the biggest banks. This concentration of power is both public and private; it's a nexus of the two, and it offers untold opportunities for corruption, abuse, and politically directed financing decisions. Creating it may have been a needed measure in the midst of crisis (though it should have been done in a more market-oriented way) but, as David Frum rightly notes, a major reason to vote for McCain is that he, unlike Barack Obama, wants to get government out of the banking business as soon as possible.