Breaking Down the Great American Recession (from Michael Hirsh book, "Capital Offense") "The worst economic downturn since the Great Depression hadn’t occurred just because of a simple crash. An entire era had overreached—the markets-are-always-good, government-is-always-bad zeitgeist that defined the post–Cold War period. The very idea of government regulation and oversight had become heresy during this epoch. Washington policymakers came to ignore the key differences between financial and other markets, differences that economists had known about for hundreds of years. Financial markets were always more imperfect than markets for goods and other services, more prone to manias and panics and susceptible to the pitfalls of imperfect information unequally shared by investors. Yet that critical distinction was lost in the whirlwind of deregulatory passion that followed the collapse of the Soviet Union and other command economies. Finance, completely unleashed, had come to dominate the real economy rather than serve its traditional role as a supplier of capital to goods and services. Venture capital transmogrified into speculative fever. Innovative ways of financing new business ideas evolved into vastly complex derivatives deals, like subprime-mortgage-backed securities, that were often little more than scams."