Professor Tyler Cowen, in the NY Times, lays out the myth of laissez-faire over the last eight years:
"In the meantime, if you hear a call for more regulation, without a clear explanation of why regulation failed in the past, beware. The odds are that we’ll get additional regulation but with even less accountability and even less focus on solving our very real economic problems."
Lefties and regulators are licking their chops due to the current financial troubles whose origins lie, in great part, with government. Yet they unreflectively want more regulation. Consider this:
"And legislation that has been on the books for years — like the Home Mortgage Disclosure Act and the Community Reinvestment Act — helped to encourage the proliferation of high-risk mortgage loans. Perhaps the biggest long-term distortion in the housing market came from the tax code: the longstanding deduction for mortgage interest, which encouraged overinvestment in real estate."
Professor Cowen’s piece is a good antidote to this kind of thinking. (Is it me? Or is it time Paul Krugman yielded his column to a superior mind? Cowen is the perfect candidate for the job.)