“The U.S. Treasury Department wants to give regulators discretion to define proprietary trading as the White House tries to revive its plan to bar banks from making hazardous bets that could cause another financial crisis.

One month after President Barack Obama said firms “will no longer be allowed” to trade for their own accounts, officials say they need flexibility to avoid impairing the $7.2 trillion Treasury securities market. “

Rolling Stone’s Matt Taibbi has in recent years undertaken a layman’s education in high finance, so that he is now able to deliver to readers pungent essays of denunciation. One or two of his memorable epigrams of scorn, especially concerning the investment firm Goldman Sachs, have really stuck, and now appear in the press constantly. The knavery of Wall Street, to be sure, is a treasure-trove for writers with sharp pens, but Taibbi has really excelled at this stuff, most recently in this essay, which ably describes a handful of the more brazen boondoggles that financiers have inflicted on the Republic ever since the generosity of the taxpayers was extended to most every finance firm on earth.

But leaving aside the specific tales of Wall Street swindles, what concerns me here is that underneath all the vulgar bluster and riotous sneers of Taibbi’s treatment of these matters, the careful reader will discern something extraordinary: Taibbi and Rolling Stone have assumed the office of public moralist.

Now anyone familiar with Rolling Stone over the years will not fail to register how discordant such a claim sounds. Therein lies a remarkable irony. This magazine has been at the forefront of cultural antinomianism since its inception. It has marched in the vanguard of every proposed liberation from traditional mores since its founding in San Francisco in 1967.

A personal anecdote will perhaps convey the depth of this commitment to anarchic morals at Rolling Stone.

Around a year I ago, I got word that Bob Dylan would be gracing the cover of the magazine. Being myself an enthusiastic Dylan fan, I went to purchase a copy when the issue appeared — and discovered to my chagrin (but hardly my surprise) that the essay following the Dylan cover story was an unabashedly sympathetic treatment of a female hard-core porn star, who looked for all the world like “Ophelia” of Dylan’s song “Desolation Row”:

Now Ophelia, she’s ‘neath the window

For her I feel so afraid

On her twenty-second birthday

She already is an old maid

I instantly abandoned the idea of purchasing the magazine, and went to the library to photocopy the Dylan article instead.

The point is that in any other context besides banking, Rolling Stone would treat of moralists with unrelenting scorn and derision. The magazine has been extolling the irresistibly admirable qualities and transgressive coolness of rebels, thugs and charlatans for several generations now. Were Goldman CEO Lloyd Blankfein, instead of a staid and respectable financier who has worn suits every day for 30 years, a slick mafioso captain, or a scruffy counterculture radical, or a chic academic theorist of anti-bourgeois revolution, Rolling Stone would adore him, and hold him up for the admiration of all right-thinking readers. Would Blankfein only intersperse his Congressional testimony on credit-default swaps with biting jabs at American imperialism, or the oppressive conformity of middle class life, or the imposture of Western literature — or, but this is too obvious, Sarah Palin — Taibbi and Rolling Stone would be fettered and disarmed.

There is a passage at the end of Taibbi’s essay that is so utterly bereft of self-awareness it deserves to be elevated into the pantheon unintentional irony. That Taibbi’s argument is quite irrefutably right only amplifies its almost comical obtuseness. Observe.

The real problem [with Wall Street] is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.

As I say, he speaks the hard truth. No laws or regulations, no matter how wise or vigilant, can, under conditions of liberty, govern a lawless people. Self-government remains utterly dependent on the self-discipline and restraint of the citizens. If men will not govern themselves, there can in the end only be anarchy and pillage, or tyranny. Taibbi’s argument is beyond dispute. It is also profoundly and ineradicably conservative.

As Taibbi and Rolling Stone perceive, at least in this one narrow context, we all depend upon the internal moral structure of a civilized people. “The system assumes a certain minimal level” of internalized ethics.  In a word, our democracy, liberty and free markets themselves depend on our culture.  And those who seek to undermine the moral content of that culture strike at the roots of everything else we hold dear.

Rolling Stone has dedicated its institutional life to undermining the internal ethical system and “civic instinct” our culture rests on, and whose absence Taibbi only now notices. It has taken dynamite to the mores and inherited assumptions which were the foundation for American self-government. It has sown doubt and cynicism about virtually every aspect of our political tradition. It has treated of imaginary futures with a naïve utopianism; and the past with a witless animosity. It has upheld the most forgettable degenerates and fools as heroes; and ruthlessly and unscrupulously denigrated our true heroes — who, being dead, are safely incapable of rejoinder. In a word, it has put in a solid half-century of work demoralizing America.

And here this magazine, when it comes to the subject of finance capitalism, would pretend to the office of moralist. On this one matter, its anarchic moral code suddenly becomes properly repugnant. On this one matter, it is readily detectable that the brazen mountebank, who crowns plunder with insult, is in plain truth an enemy of liberty. On this one matter Rolling Stone lays hold of the old verities of Christian civilization which its vocation has ever been to ruin and despoil.

To Matt Taibbi and Rolling Stone the rest of us can only say, with a touch of indignation: you reap what you sow, brother.

Paul Cella blogs at What’s Wrong With the World.

Let’s take a quick look at long-term US fiscal policy. Fair warning: I’m going to leap over a large chunk of the logic chain, and I’m also going to look past the countercyclical policy that is currently the focus of so much handwringing.

The US fiscal problem is ultimately the same as the one in Greece: too large a public-spending commitment, and not enough economy to support it.

The American people have emphatically ruled out heavy borrowing (Japanese and Greek style) to fill the gap. And American political elites care too much about getting re-elected to do anything serious about reducing the size of the public commitment. (Progressives like Paul Krugman who wail keeningly that Obamacare is the answer have naively fallen for the fantasy that nameless, faceless committees and commissions can force politicians to do what politicians won’t do willingly.)

That means higher taxes and a smaller US economy. This much is baked into the cake. The next question is: what taxes will we raise? Here we hit the age-old tension between fairness and economic logic.

There’s an ever-shifting balance between the goals of forcing society’s commitments to be borne more-or-less exclusively by those with high incomes, and the imperative of not destroying the economic incentives that produce income in the first place. The need to find this balance is a universal problem, not specific to 21st century America.

There’s a relatively simple way to deal with it, however. America’s income taxation has gotten more steeply progressive with every change in tax law over the past two decades. We need a much more regressive tax system.

That doesn’t necessarily mean cutting tax rates on high-earning individuals. Even though this would be economically very beneficial, it’s not going to happen as long as Americans are satisfied with a president who thinks we should spread the wealth around. It does mean significantly raising taxes on the roughly one-half of Americans who pay no income taxes today.

The right way to do this is through a VAT, possibly reaching as high as ten or twelve percent. And we need to resist the temptation to abate the VAT for the lowest-income people.

The economic logic behind this is very simple: as things stand today, too many Americans receive government benefits, while facing little exposure to the cost of those benefits. They thus have no incentive to apply political pressure to control those costs.

And make no mistake: there are a great many ways to reduce the cost of delivering the government services Americans demand. But until there is political pressure to do so, those savings won’t be realized.

And the only way to get political pressure to make government less wasteful is for a much larger proportion of the population to feel the costs.

It’s not terribly difficult to raise income taxes on high-earners. The costs of doing so fall primarily on lower-income earners in the form of less economic growth and higher unemployment. Most people don’t make this connection.

But a broad-based VAT would make the cost of government apparent to everyone. Then we’ll finally start seeing some positive changes in our fiscal outlook.

And this is a perfect thing for Barack Obama to pursue. He’s already told us that he wants to be the anti-Bill Clinton. He wants to achieve historic change, even if doing so causes us to chuck him out of office after one term.

Ok, Barack, here’s your chance: Push a broad-based VAT through Congress. You and your party will get slaughtered in the next elections. This will give you your wish as you’ve expressed it, and will also open your way to the presidency of the whole range of high-end universities and NGOs.

But you’ll have set the stage for a significant rationalization of the cost of government, producing significant gains in employment and growth. When a future Republican president tries to take credit for those improvements, your friends in the media will be right there to say that you should get the credit instead.

Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University’s School of Communication in Washington, D.C.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.