Simon Johnson blisteringly asks whether the same regulators and systems that helped cause the economic crisis are being rewarded for staving off the worst of the calamity. Johnson asks whether we're all watching a case of firefighter arson.
He writes on Baseline Scenario:
No one is suggesting that our illustrious financial firefighters deliberately triggered a crisis. But, for over two decades, they and their close mentors oversaw the operation and development of a banking and securities system with profound instability hard wired into its DNA.
Johnson, former chief economist for the International Monetary Fund, has been a critic of the official response from the outset of the crisis. He argued that the Obama administration should nationalize troubled banks, and here he unloads on the new plan for overhauling financial regulation: