Remora

LI looked forward to some raw conservative outrage over yesterday's vote in the Senate. Aren't we talking about a vast increase in the regulatory apparatus? I mean, sure, it is sweetened with some fire-eating go straight to jail legislation, which is always pap to the right-wing palate. But if that kind of legislation is actually enforced, we are talking about jailing white boys in suits.

Okay, realistically, we know the swat team approach to fraud will die very quickly on the vine. At least Alan Reynolds in the National Review has the guts to defend the potential pool of defrauders:

"I'm all for suing the pants off anyone proven guilty of fraud, barring co-conspirators from serving as corporate officers or directors, and using prison sentences when appropriate (though victims can't squeeze much reimbursement out of jailbirds). It is the uncritical rush to "reform" accounting and to encourage runaway regulation that worries me. The curiously trendy idea that investors welcome unlimited regulatory "investigations" by the Securities and Exchange Commission (SEC) seems particularly hazardous."

That kind of cautionary note is the reason the National Review exists, for God's sake. But the NRO editor has gone pink, or at least into guerilla mode. Instead of condemning the sudden flight to Naderite solutions, Larry Kudlow ladles on the "good news" gravy -- how things are looking up out there, really, folks. The economy is fundamentally sound is the message. Whenever presidents use the word fundamental in the neighborhood of economy, you know that something bad is going on -- that's been the unfortunate Bush's message lately, and it has had the effect of creeping Wall Street out. Kudlow outlines his own golden vision, which is for moderate growth. He also includes a bizarre graf:

"For those who still hold to the longer-term view of personal finance, which is the key to successful investing, today's market averages look to be nearly 40% undervalued."

What this means is anybody's guess. Let's call it the Glassman fallacy -- endemic among a certain kind of gung ho rightwinger -- which holds that the risk of holding stocks -- what, after all, makes stocks a potentially more profitable instrument than bonds, but also a riskier one -- has magically vanished. Hence, no need to look to historic P/E levels.

Perhaps Kudlow is subject to this fallacy because he is, at core, just a mark, a confidence man's happy accident. In support of this line of speculation, read the end of his column. It is a mark's prayer for sure:

"For those of you who have faith, now's the time to rely on it. Faith defeats the forces of darkness. Faith brings on the forces of good. The stock market has survived tough runs before, and it will do so again."

What makes LI sad is the apparent capture of conservative organs of thought by the Republican party. The National Review used to be a pretty independent place. I remember when they had no trouble turning on Richard Nixon. But as the conservative ground troops took over the Republican party, the Republican party also took over the conservative ground troops. Hence the inability to rise to any position above the last one adumb dumb dumb brated by our current POTUS. I mean, really, we expect a little cold blooded defense of unregulated commercial activity from our most prominent right wing journal of opinion. And damn the electoral consequences.