Here’s an interesting take by Holman Jenkins on the causes and evolution of the financial crisis. I’m not sure that I agree with it all (in fact, I’m pretty sure I don’t), but the following is spot-on as warning if not necessarily (yet) as prophecy or, for that matter, history (was the global financial panic really “unforecastable”?).
In the 1980s, America flirted with industrial policy and protectionism to meet what was regarded as a Japanese economic threat. But our entrepreneurial bias prevailed in the end: While the Japanese bureaucracy was directing that country’s technology giants to dominate the manufacture of computer memory chips, perceived as the “strategic” resource of the 21st century, Silicon Valley was mostly left to its own chaotic, mercurial devices — and ended up focusing on microprocessors, software, multimedia, and networking. Given birth were the personal computer industry and, in due course, the internet. Try to imagine Microsoft or Google springing from the plan of a bureaucrat at Japan’s Ministry of International Trade and Industry.
That’s a nonmistake we apparently won’t make again. With its vast ambitions across broad swaths of the economy — from health care to energy to education — look for endless acts of industrial favoritism from Obamanomics. President Obama, with his confident judgment that the future is “green” energy, that government can deliver “affordable” health care, that everyone can and should go to college, has all the hubris of a miti bureaucrat of the mid-1980s and little apparent appreciation that America’s strength is the decentralized economic agenda thrown up by entrepreneurs and inventors and opportunists whose every impulse Washington doesn’t try to corral and control with mandates and incentives.
In sum, the global financial panic sparked by the behavior of subprime mortgage loans is probably best understood as an unforecastable accident of history. Another accident, brought on by the first, is the empowering of the Obama agenda, born in the inexperienced mind of a Chicago academic and state legislator. It is likely to end badly, as such dirigiste overreaching always does.