It’s still amazing to me that we just had an election where both
candidates promised more intervention in the economy, because the
market just wasn’t grown up enough to handle being "free". By "free
market", they must mean politically driven lending practices, price
fixing in labor markets, price supports in agriculture, tarrifs in
steel trade, illegals relegated to permanent underclass, artificially
low interst rates, government enforced monopolies, and fake money.
This needs to be said over and over again just like we need to remind people that the Great Depression wasn’t caused by laissez-faire.
That doesn’t mean that free markets are perfect. Or that you can’t have bankruptcies or meltdowns or bubbles or busts. But to get a really spectacular meltdown like we’re in the middle of now, for that you need government.
That doesn’t answer all questions. I think most of us, like Alan Greenspan and others who have yet to say mea culpa, thought the system had more stability even with all the distortions. We have plenty of work to do understanding how the system collapsed so utterly. Just don’t tell me that it’s all caused by market forces run amok or unfettered markets.
The basic point that financial markets are actually highly regulated and that manipulating the housing market is one of government’s favorite hobbies needs to be on t-shirts, lapel pins, and 3×5 cards for giving out to friends when they explain the Bush years as the last gasp of laissez-faire. A folk song would be nice, too.