This Month's Topic: Is the current crisis proof conservative economics is wrong?
A banking crisis of massive proportions — at last look requiring perhaps a $1.5T bailout — has been the focus of government action for some time now, with the gurus of Wall Street strangely silent, and the perps who engineered the crisis — those big-brained big-time investment house geniuses — sneaking out the back door. The government is buying stakes in banks, and will even be setting up and running investment institutions. The private sector caused it, didn't see it coming, and has no answer for it. Is this proof-positive that conservative economics is a thing of the past?
Conservative Response:
It is unfortunate that people are looking to liberal principles to solve a financial crisis caused by liberal government. We are looking to government to get us out of a government-caused mess.
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Many are calling for more regulation as the savior of the system — and of people's investments. But the system was regulated — highly regulated. Ratios for cash-on-hand to loan amounts were in place. Rules governed the process, and we are not seeing a line of Wall Street suits awaiting prosecution for breaking any of these rules.
IF we had been following conservative principles to begin with, we would have a fast-growing economy, not a floundering one. Sound monetary policy, lower taxes, less debt, a stable dollar, less government spending: were these principles in place, we wouldn't be having this virtual conversation.
Unfortunately, we are heading in the direction of the government not only regulating but owning businesses, like investment houses. That is bad mojo.
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— Editor
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