Christian E. Weller: The Consequences of conservatism

  The 2012 presidential primary season is already upon us and the Grand Old Party is, not surprisingly, engaged in a grand old opportunity to rewrite history about the causes and consequences of the Great Recession. So it’s time, once again, to set the record straight.

  The Great Recession was so great not just because of very sharp unemployment increases but also due to an unprecedented decline in wealth—as the Federal Reserve detailed in a report released this week. That wealth destruction is key to understanding the Great Recession since massive house price drops led to a foreclosure crisis that then fueled massive layoffs. Much of the unprecedented wealth destruction in 2007 and 2008 can be traced back to failed economic policies under President George W. Bush, when opportunities to put the economy and the labor market on the right track were ignored.