Is it possible to avoid Crony Capitalism in the U.S.?

Further to the WSJ article on Crony Capitalism by a former Fed official, Wretchard notes:

The fundamental problem with any government attempt to the fix financial industry is how to stabilize it without getting involved in it.

"For political reasons (the financial system) has no real freedom to fail. That’s why the real cost of managing the financial sector’s problem is astronomical. . . "

Greece is a frightening, current example of what could happen both in our own federal government and in California:

Once a financial crisis is in full swing all thoughts turn to preventing a collapse.

But during the lulls the last word anybody wants to hear is “no”. Everybody is addicted to business as usual. Neither Wall Street, nor the Federal Government, nor California want to be put on short leash. Ask the public service unions. The Greek debt crisis (Greece being one place where public service unions are particularly strong) showed how difficult it was to put a stop to profligacy. Demonstrators took to the streets to demand an end to the crisis, by which they meant ‘pay us our salaries’. The Economist writes that the EU and the IMF must bail out Greece even though Athens shows no sign of stopping its wayward ways. Otherwise another weak Eurozone country may be the next domino to go over. Yet that “will provide only temporary relief”. But it must be done to keep the system from crashing. Like an addict who must get what he needs the entire universe collapses to the horizon of the next fix.

Baseline Scenario writes that more taxpayer money must be infused now or things will really start to fall apart. The Greek crisis, which was never supposed to get this far, must not be allowed to go further. The catch is that the solution is guaranteed to make things go not just further, but all the way. . . .

Although the “Wall Street versus Main Street” meme may be a good administration sound bite to push financial “reform”, the idea that governments will rein in irresponsible traders is about as plausible as leaving two drunks in a warehouse full of whiskey to watch over each other. Governments are the among the most profligate borrowers of all. . . .

Read the whole thing. Sobering, along with the real-life stories about our current dire politico/economic situation. This seems like a good time for stepping back and focusing on production, developing trust and debt reduction rather than on consumption and dependence, starting at the personal level.