A new report from the Treasury Department shows we are on track to come out ahead on the investment of bailing out the banks and car companies and avoiding a little thing like an economic collapse the likes of which the world has never seen. Praise for this achievement is due all around. As the report itself states, “Collectively, these programs—carried out by both a Republican and a Democratic administration—were effective in preventing the collapse of the financial system, in restarting economic growth, and in restoring access to credit and capital (emphasis mine).”
It’s important to note that these similar measures were carried out by both the Bush and Obama administrations and they followed the same policies using a heavy government hand to correct the plummeting economy. It’s just as important to note the policies of deregulation (or never any regulation in the case of derivatives despite a clear warning) were also followed by both Democratic and Republican administrations, pushed heavily because of the almost absurd influence of Alan Greenspan. Herein lies the important distinction.
To put it simply, the hands off, deregulation policy is that of the far right, Adam Smith or Ayn Rand school of thought. It’s the belief that, despite history proving this belief errant multiple times now, the government should have no role in the economy no matter what the situation. The economy will take care of itself through competition and the government will only impede growth. This line of thought has become so deep seated in American beliefs it is almost frightening, particularly when times of crisis hit and catastrophe is approaching.
The fact is there are certain times where the government is needed to fix the economy because greed broke it. Some still believe the government wasn’t needed to stop the 2008 crisis. This is downright lunacy. If you actually believe, for example, the derivatives market could crash and everything would work itself out, the rest of us would love some of what you are smoking. That market is worth $600 trillion dollars. Yes, that is trillion with a t just in case you haven’t seen that stat before. Not a typo. If you think that can crash and everything would be peachy, I’d like to see the thoroughly researched and academically reviewed scenario showing that rosy world. (And no, this market still isn’t regulated for reasons I can’t fathom despite the allegedly socialist administration in power at the moment. Sleep well tonight.)
There are times when we need the government to regulate and intervene. Not all of the time and not everywhere. But certainly some of the time and more than we have seen over the past 30 years. If we come to understand the government does need to be a bigger factor in areas that are both difficult to control and dangerous to the majority of us who aren’t even involved, we are one step closer to avoiding these economic bubbles and near-catastrophes.
The bailout worked, we avoided catastrophe, and we came out ahead on some of this. And it’s liberal economic policy that is responsible for saving us. Deal with it Ayn Randers.
Sparking The Left 