Without tax increases, it said, the US could never recover its fiscal position

Excellent article by Will Hutton
http://www.guardian.co.uk/business/2011/aug/06/financial-system-a-madhouse
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There was fear this week – real fear. There was fear eliminating $2.5tn from the value of global shares in a mere five days. There was fear provoking the dumping of Italian government bonds at rock-bottom prices. And there was fear taking the yield on short-dated US treasury bills to below zero: investors were so anxious to park their cash somewhere safe that they were, in effect, paying the US government money to steward their savings – something not seen since the second world war.

Yet the credit ratings agency Standard & Poor's ended the week by casting a shadow over the creditworthiness of American government debt, unprecedentedly downgrading it from its AAA status, a monumental blow to the standing of the richest country on Earth and its political system. S&P's held its ground despite intense lobbying from the US treasury. Without tax increases, it said, the US could never recover its fiscal position – but tax increases, given the implacable opposition of congressional Republicans, have become impossible. The markets lurched downward.

What is required is a paradigm shift in the way we think and act. The idea transfixing the west is that governments get in the way of otherwise perfectly functioning markets and that the best capitalism – and financial system – is that best left to its own devices. Governments must balance their books, guarantee price stability and otherwise do nothing.

This is the international common sense, but has been proved wrong in both theory and in practice. Financial markets need governments to provide adult supervision. Good capitalism needs to be fashioned and designed. Financial orthodoxy can sometimes, especially after credit crunches, be entirely wrong. Once that Rubicon has been crossed, a new policy agenda opens up. The markets need the prospect of sustainable growth, along with sustainable private and public debt.
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Neo-liberalism is dead - time for the funeral procession and burial.

This so-called "adult supervision" is the very thing that has allowed the rich and the powerful to destroy our free-market economy. Now, by free-market, I do not mean pure, unbridled, laissez-faire capitalism. For that results in the same concentration of wealth that occurs when the rich and the powerful control the economy.

However, when the market is overly-regulated by the powerful, consumers do not get to choose the best products; they get to choose from products that are produced by companies with the best lobbyists. Or, as is the case with ethanol, we don't have choice; we are forced to buy their products.

And then there are the costs associated with their regulations --$1.75 trillion/yr by most estimates. The US is the world's leading producer of red tape and it is choking us to death.

Well, not all of us. For the ones who write the rules get to sell us stuff we don't need and force us to pay them to regulate us.

It is important to understand that regulation is often powerfully misused to actually destroy, limit, or hobble competition.

There is plenty of pulling up of the ladders, setting up situations that financially eliminate all but established operators.

In some cases this is hard to help. Ma Kettle's deepsea drilling might well turn out to be a bad idea.

This is the same thing the right always does when their policies fail-
CLAIM they didn't go far enough or last long enough.
My answer BULLSHIT they failed because they are fantasy.
get over it and get real or get out of the way and let some REAL democrats take over