Peter Ferrara

On December 21, Bloomberg News breathlessly reported, "The leading Republican candidates for president have embraced an explanation of the financial crisis that has been rejected by the chairman of the Federal Reserve, many economists and even three of the four Republicans on the government commission that investigated the meltdown."

Reporter David J. Lynch further explained, "Both former House Speaker Newt Gingrich and former Massachusetts Governor Mitt Romney lay much of the blame on U.S. government housing policies, saying they led to the real estate crash that almost brought down the banking system and has cost homeowners $6.6 trillion since 2006."

But it's not just Gingrich and Romney. Virtually every Republican and conservative across America recognizes what is by now well established in the literature -- the government caused the financial crisis.

Among the leading expositions of that government malfeasance are Paul Sperry, The Great American Bank Robbery: The Unauthorized Report About What Really Caused the Financial Crisis (Thomas Nelson, 2011), Gretchen Morgenson and Joshua Rosner, Reckless Endangerment (Times Books, 2011), John B. Taylor, Getting Off Track (Hoover Institution Press, 2009), and many contributions by Peter Wallison, including in particular his Dissenting Statement in Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (December 24, 2010). My own book, America's Ticking Bankruptcy Bomb (HarperCollins, 2011), explains in great detail how the government caused the financial crisis.

This is not just a matter of historical interest. It will be central to the debate throughout the 2012 election cycle. For if the liberal/left propagandists are right, and private sector greed and malfeasance caused the crisis, then President Obama's regulatory government takeover of the financial industry is the answer. But if the government caused the crisis, then the further extension of Reagan's free market policies are the answer.

Clinton's Overregulation

Peter Ferrara

Peter Ferrara is a senior fellow at the National Center for Policy Analysis and a Senior Fellow at the Heartland Institute.