Greed or Stupidity

So David Brooks is saying that there are two 'guiding theories' about how we got into this mess, and that you can either believe one or the other. But why not take it a step further? While I personally am leaning toward the greed narrative, why can't you have large oligarchies behaving stupidly? Isn't it a compelling argument to think that these giant banks and their hubris coupled with their computer models led them to think that they could grow to enormous size, hedge their bets, AND grab more power in Washington? What was stopping them? Uh, nothing! So we need to break the banks (everyone besides the banks seem to agree on this) and then stop them from getting fat and stupid again.

So how do you go about breaking the banks? My hope is that Geitner's stress tests are his way neutralizing the idea of nationalizing the banks. There is a lot of resistance to nationalizing, but if Geitner can point to the stress tests and say, "Look here, there's nothing left to do but nationalize." then he has queledl the debate against nationalizing. However, he could also be using the stress tests to hide just how bad the banks' balance sheets are and then throw more money at them. Now I know that sounds like I think that Geitner is a conspirator or something. He's not. I do think that his reliance on experts and his own experience does have a whiff of conflict of interest to it, and I do think that the Wall Street power players are leveraging that to their advantage.