Putting the Financial Crisis in Political Context

Michael Barone places the "financial ructions" of the day in historical and political context in a brilliant and brief column published yesterday, before the debacle on the House floor.

You can sum up much of 20th century history by saying that in the 1930s Americans decided that markets didn't work and government did, and that in the 1970s Americans decided that government didn't work and markets did.

The protracted and painful experiences of those decades changed basic public attitudes on the balance between government and markets, between regulation and enterprise, between government aid programs and self-reliance. The breadlines and depression of the 1930s moved Americans in one direction; the gas lines and stagflation of the 1970s moved them in the other.

Which raises the question of whether the financial ructions of 2007-08 (09?) will move them back again.

He goes on to examine the passage of time has blunted collective memory, setting the stage for a pendular swing back to the 30s. Here's what's at stake.

Reviewing the long course of history, I think it's obvious that market capitalism, together with the rule of law, hard currency and regulations that ensure transparency and accountability, has produced bounteous growth and the resources to address problems that require government action, like defending the nation and protecting the environment.

Read the whole thing.

(Crossposted at Olympia Business Watch)