The Economic Crisis: An Ideological Rorschach Test

Abstract

The current international financial crisis, which began in the U.S. subprime mortgage market, and soon spread more generally through the financial system, has led to urgings from many quarters for increased government funds and increased government regulation. The calls for greater regulatory intensity have frequently been conjoined, particularly in the United States, with attacks on the “deregulatory impulses” or “deregulatory ideology” that were said by some to have characterized governmental attitudes in the early twenty-first century, and to have created the conditions that led to the financial crisis in the first place. The recent financial mess seems to have become a kind of ideological Rorschach test, representing to some an unmistakable picture of spectacular market failure, while others see an equally clear picture of spectacular government failure. Ideological and political opportunism threaten to cloud efforts to confront the causes of the recent crisis honestly, and take effective steps to prevent a subsequent economic disaster. From both ends of the political continuum, people of good will must commit themselves to ensuring that the clarity of intellectual honesty trumps the distortion of ideological bias.