The 2008 financial crisis is viewed in diametrically opposed perspectives by economists depending on their presumptions.
Those whose presumption lies in favour of free markets and against the effectiveness of regulation view it as unambiguous evidence of the failures of ubiquitous regulation in general and of the failures of monetary and housing policy in particular.
Those whose presumption lies against free markets and in favour of the effectiveness of government regulation view it as unambiguous evidence of the failures of deregulation and insufficient regulation in general and of financial markets in particular.
Neither side is stupid, though they cannot both be right.
One example of the second group are those associated with an academic project that was initiated right after the crisis entitled the Tobin project (after Yale economist James Tobin). The first book published by the project is entitled New Perspectives on Regulation. I am reading it and becoming more frustrated by the minute. The first chapter is by Joseph Stiglitz (much admired, even revered by his colleagues). If I am right it is a litany of naive fallacies and non-sequiturs.
How does one navigate in this world when the majority see reality so differently? I guess one appeals to the dicta of St Francis.
