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Posts Tagged ‘Nick Timiraos’

Fair-Weather Capitalists Killing Capitalism

Posted by Steve Markowitz on September 14, 2010

The American economy continues to be in distress.  While many point to the fall of Lehman Brothers two years ago as the starting point for this downturn, the causes began much earlier.  While the problems began long before the election of Barack Obama, he has been responsible for not allowing the economy to rebalance itself, a requirement before real recovery can occur.

The Right often blames the liberal policies of Democrats for the socialization of the American economy and a major cause of our economic problems.  Many on the Left blame the free-market and lack of government oversight for the downturn.  Both narratives are overly simplistic and incorrect.  Both political parties took the same basic macroeconomic approach, i.e. excessive debt and having government become more intrusive in the economy, but placing a different spins on it.

Irrespective of the party in power, excessive private and governmental debt was used that led to the severity of the ongoing economic downturn.  With governmental debt, Republicans often justified the debt by promoting military spending while Democrats promoted social programs.  Both parties also approved governmental policies that promoted more private debt including subsidizing Fannie Mae and Freddie Mac and pressuring the Fed to lower interest rates whenever the economy had a hiccup.  While each side found their justifications for the debt reasonable, from a macroeconomic standpoint the results were the same.

Both parties also made government more intrusive in the economy; Read the rest of this entry »


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