Economics professor Steven Horwitz has written an open letter to our friends on the Left, explaining patiently that the financial crisis is due to federal meddling and not, as the scapegoating has it, deregulation and capitalistic greed.
We free market advocates are constantly saying that government intervention is counter-productive. This case really shows that we’re not just yakking away about theoretical notions. Right now, there are unsophisticated poor people who have lost some of their small wealth because they got into real estate deals that would never have been considered in the days before the federal government pressured banks to make more loans in “underserved areas.” The well-intentioned and supposedly progressive, socially-just vision of politicians like Bill Clinton has boomeranged on its intended beneficiaries. Is it not perfectly clear, at least in this instance, that laissez-faire would have been better than political intervention?
