Street signs in London

The Political Consequences of Financial Crises

In the first wave of post-2008 elections, in Europe and elsewhere, voters’ verdict on their governments – whether of the left or the right – was more or less identical: things went wrong on your watch, so out you go. But now we can see a familiar historical trend emerging, particularly in Europe.

LONDON – I may not be the only finance professor who, when setting essay topics for his or her students, has resorted to a question along the following lines: “In your view, was the global financial crisis caused primarily by too much government intervention in financial markets, or by too little?” When confronted with this either/or question, my most recent class split three ways.