- Paul Krugman on Wall Street Fraud In light of the recent SEC charges against Goldman Sachs, the New York Times columnist examines the role of fraud in shaping the financial crisis. Krugman concludes that while financial finagling by Wall Street execs was the root cause of the crisis, predatory lending and the dubious sale of mortgages "surely made it worse, both by helping to inflate the housing bubble and by creating a pool of assets guaranteed to turn into toxic waste" once the housing bubble burst. "The obvious question is whether financial reform of the kind now being contemplated would have prevented some or all of the fraud that now seems to have flourished over the past decade," muses Krugman. "And the answer is yes."
- Clive Crook on U.S. and European Norms The Financial Times columnist and Atlantic blogger warns a move toward "Europeanization" by the Obama administration could bring unintended consequences, particularly if increasingly powerful unions meet the "clashing ideologies" prevalent in U.S. politics today. "Social direction – including strong trade unions – has worked well when supported by a centrist consensus," he reasons. "Add similar institutions to divided or adversarial societies, and things go wrong." Crooks ominously concludes: "Americans are indeed exceptional ... But cross American turbulence with polarised politics and 'European' ambitions, and watch out."
- E. J. Dionne on the Tea Party's Privileged Populism With Tea Party media coverage on the rise, the Washington Post columnist counters that "both major parties stand to lose if they accept the laughable notion that this media-created protest movement is the voice of true populism." Citing a recent survey of Tea Partiers indicating "racial concerns" are part of the anti-Obama anger, Dionne argues the movement is old news:
The Tea Party is essentially the reappearance of an old anti-government far right that has always been with us and accounts for about one-fifth of the country. The Times reported that Tea Party supporters "tend to be Republican, white, male, married and older than 45." They are also more affluent and better educated than Americans as a whole. This is the populism of the privileged.
- Elliott Abrams on Israeli Self-Defense In National Review, Abrams, a former national-security adviser in the George W. Bush administration, pens a coolheaded defense of Israel's right to strike Lebanon if it holds a cache of Syrian weapons. Such a stockpiling would violate Resolution 1701 of the United Nations Security Council, a measure that Abrams quotes at length to illustrate his point. "Sending SCUDs to Hezbollah will not be tolerated," Abrams writes, "and Israeli military actions taken to prevent it will have full American support."
- Adam Cohen on Warnings Gone Unheeded In a New York Times op-ed, Cohen surveys a decade's worth of evidence ignored and cautions heard too late. From September 11 to Hurricane Katrina to the financial crisis, Cohen points out, the signs of disaster were all there well in advance, but "incompetence," "ideology," and "inertia" prevented the necessary responses. Cohen wonders whether there's something we can learn from this pattern: "The next time someone is inclined to hold hearings on a disaster, they should go beyond asking why particular warnings were ignored and ask why well-founded warnings are so often ignored."
Want to add to this story? Let us know in comments or send an email to the authors at aeichler at theatlantic dot com, or jkeller at theatlantic dot com. You can share ideas for stories on the Open Wire.