Spitzer on the Economy

In Sunday's Washington Post, former New York Governor Eliot Spitzer has an excellent rundown of the current economic crisis (brought to my attention via Noam Scheiber at the Plank). Spitzer also details a helpful framework that would correct many of the root causes that led to the current situation. I think my favorite passage from Spitzer's piece, is this disarming explanation of government's role in free markets:

Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum. Rather, a market is a product of laws, rules and enforcement. It needs transparency, capital requirements and fidelity to fiduciary duty. The alternative, as we are seeing, is anarchy.

It's unfortunate that Eliot Spitzer's personal problems have prevented him from taking an active role in correcting our current economic ills. However, it is good to see that his ideas are receiving a platform, if only for a day, at the Post.

Damn You Spitzer

I agree with Ezra Klein the fact that Wall Street is celebrating the discovery of Eliot Spitzer's involvement with a prostitution ring really makes me want him to weather this, however, I just don't think its gonna happen. As Matt Yglesias points out, they have recorded evidence that he solicited a prostitute. We can all say what we want about whether or not prostitution should or shouldn't be illegal, but the fact is, in most of the country, in this case New York and Washington, prostituion is illegal. Therefore, if Spitzer committed a crime, he will most likely be subject to prosecution, and in that case, he should resign.

It's very frustrating because Spitzer was waging a hard fought battle against corruption in a state capital that is infamously rife with it. Spitzer had made a promise to make capitalism fairer for the common man, therefore it is no surprise that the corporate execs on Wall Street are popping the champagne corks and celebrating the downfall of their great adversary. We expected more from Spitzer. Like Ezra says:

...what irks me about Spitzer's actions is similar to what I've always held against Bill Clinton in the Lewinsky scandal -- it's not the act, but the audacity and selfishness of committing it when so many powerful adversaries were watching so closely. To be sure, it's hard to live your life with the knowledge that the public good is more meaningful than your private pleasure. These are men, after all, and they slip. But at the end of the day, they chose this road, they asked for our votes, and our support and our defense. When they let these appetites get the better of them and destroy everything they've worked for, they betray their supporters, and then humiliate many of them by asking for their continued defense.

Well said. No one is infallible. In the end we are all human, and as a result, we screw up sometimes. However, the Spitzer episode is particularly disconcerting because of the blatant hypocrisy involved. Spitzer had busted up and prosecuted prostitution rings in the past and spoken out strongly against them. For him to be done in (which remains to be seen, as he has not yet resigned) by his involvement, as a client, with a prostitution ring for wealthy individuals reeks of hypocrisy. It turns out that Spitzer himself was partaking in the very excesses of corporate culture that he so publicly proclaimed to detest. The people of New York, and America for that matter, had a governor that stood against overt corporate influence in government. Now that governor has been done in by placing his own personal pleasures before the public good.