But he also explodes the myth that our economic struggles were triggered by a lack of regulation. “One study shows that the costs of social and economic regulation skyrocketed by an amazing 60 percent under [George W.] Bush,” he writes, “compared to 8 percent during Clinton’s first term and 21 percent during his second.”
In fact, government intervention in the marketplace helped over-inflate the housing bubble.
Federal mandates dating to the Clinton years “required Fannie Mae and Freddie Mac to increase their low- and moderate-income loans to 55 percent of their mortgage purchases,” Brooks notes. “These government-sponsored companies and their enablers in Congress sparked the fire that burned down our financial system.”
He also lays to rest the idea that, with more power, federal regulators could protect Americans from future meltdowns. Brooks points to Bernard Madoff, who defrauded thousands of investors while a whistleblower spent years delivering detailed evidence to regulators from the Securities and Exchange Commission. There’s no reason to believe new regulations would work better than the existing ones did.
“For the leaders of the 30 percent coalition, money buys happiness, as long as it is distributed fairly,” Brooks says. “This is why redistribution of income is a fundamental goal, and why free enterprise, which always seems to reward some people and penalize others, cannot be trusted to get things right.”
Indeed, his entire book illustrates that the free enterprise system is the only way forward.
“The Battle” is on. Are you on the right side?
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