A review of how liberal governance contributed to the Great Recession is inevitable.
Professor David C. Rose from the University of Missouri at St. Louis has recently given a very brief repose of such cause.
“As the ratio of decisions governed by politics to decisions governed by economics rises, efficiency and therefore output per person rises far slower than otherwise, and perhaps falls.
The irony is that when a rich society has a downturn, people who don’t understand market economics, (which used to be called political economy), conjecture that more decision making needs to come under government control rises. This drives up the aforementioned ratio, leading to subsequent calls for government intervention, and so on. This endless cycle of ratcheting up government control of economic activity is the core of the problem. The rest is detail.”
How else to say it: the love of the mystery of specialization is intrinsic to liberal governance.
Didn’t Eric Voegelin and Raymond Aaron contribute to defining such mystery as ‘mystification’. Certainly competent people can surmise how liberal activist governance contributed to our Great Recession:
- subsidization of mortgages under the rubric of ‘social justice’ by Fannie/Freddie.
- congressional remittance of mortgage interest tax deductible.
- the crony corruption between the administrators of Fannie/Freddie in Congress by means of campaign contributions and special favors which allowed Congressional entities a ‘pass’ on questionable practices.
- banks and mortgage companies piling on with the ‘professional securitization’ by Wall Street.
- Federal Reserve keeping interest rates artificially low.
How did this end: well, when the collapse occurred, Congress distracted the public from its own role and passed the Dodd-Frank fiasco, heaping scorn and blame on Wall Street and big banks.
This is nothing more than Congress conjuring a magic trick: the game is up and November is coming.