Smart Read

Bring on the Lobbyists

Once, if you wanted to make money, "you learned to read balance sheets," writes Charles Krauthammer. “Today, you learn to read political tea leaves." The stock market fluctuations in response to Henry Paulson's statements or Barack Obama's appointments show "we have gone from a market-driven economy to a politically driven economy." This has two main ramifications for President-elect Obama: "The vastly increased importance of lobbying and the massive market inefficiencies that political directives will introduce." The bailouts in Washington, while necessary, will also invite "the most intense, most frenzied lobbying in American history." This, in turn, will risk continuing the politically driven economy rather than returning us to a market-driven one. "The banks will knuckle under to the commissars of Capitol Hill. They control the purse. Prudence will yield to politics."