I argue in the Wall Street Journal today that a huge shift to extremely interventionist economic policies in recent years rather than a shift to extremist positions is the source of the recent political clashes and governance crises in the United States. Those who claim that Americans worried about the slow growth and high unemployment caused by these policies are extremists divert attention away from serious discussion of the policies.

In the article I referred to a number of research studies and policy positions. Research on the ineffectiveness of the stimulus packages was reviewed in the book by Lee Ohanian, Ian Wright and me.  The paper by Geert Baekart, Marie Hoerova and Marco Lo Duca “Risk, Uncertainty and Monetary Policy”on the effect of the Fed on risk-taking is found here.  

Papers showing that the low interest rates going into the crisis were a factor in the housing boom were reviewed in my recent comment on the review of Alan Greenspan’s new book in the Wall Street Journal. More studies are coming out such as this article by John McDonald and Houston Stokes .

Particularly fascinating and important is the enormous disagreement about the effect of the erratic bailout policy during the crisis five years ago. The Hank Paulson and Dick Kovacevich interviews on CNBC Squawk Box illustrate this very well and are found here and here.