Last week many of the world’s leaders gathered in the tiny Swiss ski resort of Davos to discuss the state of the world and to determine its future direction (to the extent they can direct it at all). In the attached article The Acton Institute examines the highly managed “Davos Capitalism” and the call this year at Davos for a “New Social Covenant.”
Meanwhile, in the United States, Washington policy makers were pursuing top-down and Keynesian schemes to spread home ownership to more and more American citizens through a combination of government interest-rate manipulation and policies that coerced mortgage companies to issue home loans to people with terrible credit records. Together, these policies fueled a housing bubble as people rushed to get loans for homes they couldn’t afford in a “sure fire” housing economy fueled by artificially cheap credit and artificially cheap access to that credit. When the bubble generated by these Davos-style schemes finally burst (as economic bubbles inevitably do), the Davos crowd rushed to blame the free market and now are talking about the need for a new social covenant, which is mostly just more of the same top-down, redistributive “social justice” that hurried us into the present fix.