We are all learning that smaller is, if not beautiful to behold, a necessary downsizing of our lifestyles, aspirations and commitments.  This is not economic fatalism, but just a return to rationalism.  We can’t live on borrowed money forever.  Eventually, someone pays, likely our children.

Throughout this economic crisis, we’ve heard that the reason we had to bail out so many financial institutions is that they became “too big to fail.”  Yet there is little talk about how we downsize financial entities so it doesn’t happen again. Instead, and I must lay some of the blame on Tim Geitner Geithner, we’re making them bigger.

David Ignatius has a great column this morning in The Washington Post about how instead of looking to FDR for inspiration, Obama needs to ask, “What would TR do?”

A case study for today’s regulators is President Theodore Roosevelt’s response to the financial shenanigans of 1902, when the railroad barons tried to combine the Great Northern and Northern Pacific lines into a huge holding company called Northern Securities Co. Roosevelt wanted to file an antitrust suit to stop the deal. The financiers threatened that the lawsuit would cause a panic on Wall Street, to which TR’s attorney general, Philander G. Knox, memorably replied: "There is no stock ticker at the Department of Justice."

When Roosevelt ignored the threats and moved to file the trustbusting suit, he received a hasty visit from J. Pierpont Morgan, the reigning financial titan. "If we have done anything wrong, send your man to my man and they can fix it up," offered Morgan. TR responded unflinchingly, "That can’t be done."

He also points to the previous administration (while Geitner was the NY Fed president) ignored the warnings.

Even AIG knows it’s too big. "AIG’s conglomerate structure is too complicated, unwieldy and opaque," said Edward Liddy, the company’s new chief executive, who came in last fall to try to clean up the wreckage. The tragedy is that this was clear a few years ago, and nobody did anything about it. A former regulator remembers that AIG’s transactions were so tangled and incomprehensible that it couldn’t close its books on time — yet nobody thought to call a halt.

Treasury and Federal Reserve officials have continued to operate on the assumption that in finance, bigger is better — and safer. The argument for these huge, diversified financial institutions has been that in pooling different kinds of risks, they would increase the portfolios’ overall stability. That rationale helped create the monstrosity called Citigroup. It was like the argument for securitization of subprime mortgages — put enough of them together and the danger of default would be less. That didn’t work out too well.

And yet the authorities have continued to act as if greater size will provide greater stability. That was the rationale for pushing a healthy Bank of America to acquire a sick Merrill Lynch last fall. A better response to Merrill’s sickness would have been to leach out the toxic assets and then encourage an orderly breakup of the brokerage firm; it was too big already.

Meanwhile, apropos of my earlier post today, Robert Reich takes on CNBC and its ilk for trying to blame the stock market’s slide since the first of the year on Obama.

Alas, my lot (voluntary I might add) is that I have CNBC on in the background in my office all day.  Though I’ve been taught to ignore 99% of what is said there, I can’t help but catch much of its ill-advised chatter throughout the day.  It is not only often wrong analysis, it is right-wing ranting at its worst.  This morning, for example, as Larry Kudlow was accusing the administration of “waging war on capital,” one of the station’s bimbo’s, Trish Regan, chimed in and accused the administration of authoritarianism and compared it to that of Chile’s Pinochet!

Though I’ve said before that its reporting is not much more than cheerleading for Wall St. executives, John Stewart said it with much humor last night.  The entire show, including an interview with the New York Times’ business columnist Joe Nocera, who also commentates on NPR’s Weekend Edition, is right on point. (Thanks to my little brother for bringing it to my attention.)

It’s worth watching.

Think Progress has a good post on the hypocrisy of the GOP vis-a-vis the use of the filibuster.  You’ll recall that the GOP demanded an “up or down vote” on Bush’s judicial nominees.

Now, not so much.

But now that they are out of power and President Obama has the ability to appoint judges, Republicans are threatening a filibuster of judges if Obama doesn’t appease them. In a letter to the White House yesterday, all 41 Senate Republicans “requested that Obama respect the Senate’s constitutional role in reviewing judicial nominees by seeking their consultation about potential nominees from their respective states.”

Great.  Virginia’s own Sen. Mark Warner is now trying to sabotage Obama’s agenda.

Matthew Yglesias sums up quite nicely how conservatives argue that taxes on the rich should always be cut.

…[W]hen progressive tax policy has been in place during a period of growth, and that growth has led to a budget surplus, you argue not that it’s smart to balance the budget over the course of the business cycle, but rather that the surplus reflects the government “overcharging” in taxes that should be returned to those who pay the most taxes; which is to say to those who have the most money; which is to say to the rich. That’s a 1999 argument. Then if the economy falls into recession wiping out the surpluses, you argue that a tax cut for the rich is needed as economic stimulus. That’s a 2001 argument. And if the economy is growing during a period of conservative tax policy, you argue that the low taxes produced the growth so need to be kept in place forever. That’s a 2005 argument. And then if the economy falls into recession again, you argue that additional permanent tax cuts for the wealthy are the only solution.

Those who argue for tax cuts have one ultimate goal in mind:  to fulfill Grover Norquist’s vision of shrinking government to the point where you can flush it down the toilet.

If you missed it, read the lead story in yesterday’s Outlook section of the Washington Post.  It takes on the blowhards on CNBC.

…just days before Bear Stearns stock became worthless, Jim Cramer's head nearly exploded off his shoulders, so intense was his conviction that his viewers should NOT. SELL. BEAR. But what I don't understand is the hundreds of thousands of people who still tune in every night to hear what he has to say. The newfound populist fame of CNBC's Rick Santelli is a mystery, too. His recent rant against Obama's mortgage bailout plan was really just more not-so-thoughtful advice, wasn't it? His seemed to be just another yelp from the network that surely did its part showing people the way to the bottom, now telling the president with complete conviction that a lot of those people shouldn't be helped back up.

What’s left unsaid is that not only is the advice from CNBC bloviators wrong, it is delivered with a decidedly right-wing perspective.  The station lacks journalistic integrity.

One, its guests are overwhelmingly conservative.  Often, CNBC books two guests to discuss a subject.  One is a conservative, and the other is Attila the Hun.  Rarely are progressives given a platform to give the other side of the story.  More important and to the point of the article, economics is not a science.  We’re guessing.  We should have more discussions that include “yes, but.”  We can’t know what’s going to happen next in the economy, much less the stock market.  But we can have rational discussions about options and possibilities.

Two, we are asked to trust the reporting of anchors and reporters who regularly share with us their own opinions , and they, too, are far right-wing.  How are we to trust their reporting when their biases on worn on their sleeves?  The following reporters/anchors on CNBC cannot be trusted:

• Charlie Gasparino
• Maria Bartiromo
• Erin Burnett
• Michelle Caruso-Cabrera
• Dennis Kneale
• Melissa Francis
• Larry Kudlow
• Melissa Lea
• Becky Quick
• Carl Quintanella
• Joe Kernen

But Democrats and progressives must share some of the blame.  When they see unfair coverage and unbalanced views, they need to make an issue of it.  The Republicans are aggressive when it comes to media.  Dems wait for the phone to ring.

How long before:

A. Steele apologizes?

B. Steele says his words were taken out of context?

C. Steele accuses the media of “gotcha journalism”?

D. Limbaugh is crowned Grand Poobah of the GOP?

Almost as reflexive as “tax cuts are the best remedies to fix the economy” is the GOP charge that tax hikes “hurt small businesses.”  It’s a myth.

Obama’s tax hikes will impact households making more than $250,000 a year.

Ninety-five percent of small businesses would be unaffected.

And, contrary to GOPers* charges, “…most small businesses don’t create jobs. They tend to be lawyers, accountants and other professionals who earn some of their money from partnerships or otherwise organize themselves as a business entity.”

Meanwhile, small businesses are defined as those having up to 500 workers.  The difference between one lone consultant and a 500-employee company is huge.  Take it from me; I represent one of those categories.  Guess which one.

Read all about it.

*Last week, “Hardball’s” Chris Matthews took one poor Republican congressman to task for using the term Democrat party.  I’m not sure why this affectation started, but clearly it’s meant to insult the party of Andrew Jackson.  So until the practice stops, I’ll try to use either the term GOPers (rhymes with dopers) or Repugs, short for repugnant, to identify the party of Calvin Coolidge, Herbert Hoover and, of course, W, or as he hates to be called, Junior.

Washington Nationals General Manager Jim Bowden resigned this morning, saying he felt he had become a distraction to the club.

The Nationals did not immediately name a successor or an interim GM.

Not surprising, of course.

Also, not surprising was that he blamed the media.

"I am disappointed by the media reports regarding investigations into any of my professional activities," Bowden said in a statement released by the team. "There have been no charges made, and there has been no indication that parties have found any wrongdoing on my part."

For the Nats, now comes the hard part.

The Bowden controversy has obscured many promising story lines of this spring and interfered with the run-up Washington needs for the 2009 regular season. Never have the Nationals seen a greater need to sell their on-field product. With their welcome-to-the-District grace period now over, and with the honeymoon benefits of the new stadium waning, the Nationals, more than ever, must attract fans with talent and with the potential to win.

I’ll see you at the ballpark.

Today on “Meet the Press” Defense Secretary Robert Gates was asked what the difference was between working with Bush and Obama.

I think, probably, President Obama is more analytical [than President Bush] um, um, and, and, he, he makes sure he hears from anybody in the room on an issue, and if they don’t speak up, he calls on them.

Gates hesitancy is understandable.  Behind the “ums” I was able to mind read for you not having my special powers.  He was thinking, “My Irish Setter is more analytical than Bush.”