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Kristol: A Must Read

8:55 AM, Apr 3, 2009 • By WILLIAM KRISTOL
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Paul Singer's op-ed in the Journal is a must read.

Here's an excerpt:

In the past decade, most global financial institutions built highly leveraged balance sheets -- sometimes as high as 30 to 1 -- that were stuffed with risky assets. These institutions also bought on a large scale for their own accounts the same securities they sold to their customers. Our anachronistic regulatory framework didn't catch the problems, and warped incentives and compensation schemes fueled the risk-control failures that eventually brought on the crisis we face today.

Singer is one of several conservatives I've spent time with recently who's thinking through the implications of the financial crash, and trying to figure out--not to put it too grandiloquently--the way forward for democratic capitalism. Many of those with the most practical and creative ideas, I've found, are practitioners, with experience on the Street (and in some cases in government); some are business school professors. They're at once free-market-friendly and free-society-committed, while understanding that we need to devise and implement a reasonable structure of law and regulations that will prevent system-threatening leverage, opacity, and irresponsibility. Singer and others can point us to a path very different from Obama-like nanny-state liberalism, but also different from head-in-the-sand-everything-was-fine-except-for-the-Community-Reinvestment-Act conservatism.