The banking crisis of 2008 and its attendant deep recession have been hailed by statists the world over as the ultimate demonstration of capitalist greed and a justification for more and more regulation and government control of the economy, particularly the financial sector. Their argument boils down to an accusation that private actors in the marketplace are incapable of dealing with systemic crises and that government is the only agent that can address the market as a whole in order to combat panics and economic shocks. That argument won out in the aftermath of the recession, leading to a raft of new regulations, most notably the voluminous Dodd-Frank Act.
“Gold is money. Everything else is credit.” — John Pierpont Morgan
It has become part of American tradition to demonize industry, always framing it in the classic “little” versus “big” or “good” versus “evil” scenario. Regardless of the role that corporations…