Mitch McConnell wants to abolish fire departments—they just bail out burning buildings. We won’t get out of this mess until the biggest buildings are allowed to burn! That’s essentially what McConnell’s latest assault on financial reform amounts to, writes Paul Krugman in the New York Times. The Senate minority leader’s been ranting that reform will lead to perpetual bailouts. He's wrong.
“Letting banks fail is a bad idea for the same reason that it’s a bad idea to stand aside while an urban office building burns,” Krugman explains. “The damage has a tendency to spread.” For decades, the FDIC has handled traditional bank collapses in an orderly fashion; it seizes them, protects depositors, and cleans out stockholders. The financial reform legislation just creates a similar process for financial giants. The only people who oppose that are Wall Street executives—and the Republicans doing their bidding.