The Mistrust of Politicians and Bankers

I arrived at the White House on November 14th, 2008. It was not my first visit there, but by any measure, it was the most consequential. You occasion was the inaugural meeting of the newly-christened Group of 20, or "G20.......

The world was lunging from an economic slowdown to an economic meltdown to total panic. Financial markets were frozen. Stock markets were plunging. Shipping volumes were in a free fall. The global economic situation was visibly worsening by the day. In short order, the US economy alone would lose nearly 9 million jobs, see 10 million foreclosures, and shed nearly three and a half trillion dollars in retirement savings.

As Leaders, we were not under any illusion about finding Perfect Solutions. The options before us were all bad, and the only objective was to avoid imminent Calamity. The meeting's final communiqué committed to "whatever further action are necessary to stabilize the financial system. " And we meant it. The stage was set for massive worldwide deficit spending, unprecedented and coordinated monetary interventions, and huge corporate bailouts.

In the weeks and months that followed, a measure of stability return. The Panic subsided and financial institutions stopped collapsing. The stock market bottomed out. In fact, it returned to pre-recession levels faster than most of us had imagined. Corporate profits, too, recovered comparatively quickly.

For many people, however, things would never be the same. As the Great Recession faded for some, employment and wages leg behind for most......

This experience has taken its toll on the Public's enthusiasm for markets, capitalism, and globalization.....

Add insult to injury, when the crisis hit, the result was unremitting capitalism for the working class and socialist protection for the Wall Street financier who caused the Meltdown in the first place. Still, in many Elite circles, the old narratives quickly returned. Even Bank Executives were soon back to paying themselves bonuses - not that they had ever really stopped - and decrying any attempt to regulate their sector.....

I am not saying these things to denounce or disparage the American system. I still believe in the general efficacy of markets more precisely, of well-governed markets. History shows unambiguously that capitalism usually produces Fair better incomes than the Alternatives. The market has a unique ability to connect capital and ideas with customers, and to drive sustained economic growth. The tendency of government, by contrast, is to politicize the allocation of wealth and opportunity at every turn."

- Stephen Harper. Right Here Right Now: Politics and Leadership In the Age of Disruption