There seems to be a major and minor key in discussing the reactions to the Global Financial Crisis.
The major key is exemplified by John Quiggin's Zombie Economics (Princeton, 2010), a Keynesian critique of the nexus of ideas and practices known as "neoliberalism," including the Great Moderation, the Efficient Markets Hypothesis, and the interpretations of the Great Depression and the stagflation of the 1970s those ideas produce. This critique aims at the failures of theory and practice, which if corrected, could have either prevented the crisis or responded to it more effectively. Prevention: by not buying into the EMH's thesis that bubbles wouldn't occur in unregulated financial markets, and hence by properly regulating financial markets using the tools developed in the 1930s--for instance, in the US, the Glass-Steagall Act. Response: the resistance to the stimulus is seen as a hangover of failed ideas and policies, hence the "zombie" trope, which Paul Krugman picks up here.
The minor key takes up class analysis, and this has itself two themes, a negative and a postive one. The negative theme is that capital is retrenching to avoid awakening the working class power that Keynesian remedies support. Richard Seymour expresses this well:
The only plausible alternative to neoliberalism is to attack the wealth and power of the rich - to kill off the rentier, nationalise the banks and convert them into public utilities, redistribute wealth to support demand, engage in mass public housing projects (no more bonanzas from property speculation), and to strengthen the bargaining power of labour to support incomes and demands in the future. This is simply not something the CBI or the British Chambers of Commerce would ever be interested in, even if the alternative was to pull up the drawbridges and allow the economy to tank for a generation. The austerity agenda is thus not just a gamble on squeezing another few years of growth out of the neoliberal accumulation model, but a defensive project against the Left.
The positive theme of the class-based analysis of the minor key response claims that depressions are positively desired by the ruling classes. This is not a conspiracy theory about the origins of the crisis, but an interest-based analysis of the response. That is, certain elements of the ruling classes see depressions as opportunities (this is rougly speaking the Naomi Klein Shock Doctrine thesis).
Here I see two factors, one rationalist, the other involved with "political affect." First is the rationalist motive: depressions provide opportunities for bargain hunting, as depressed asset prices provide a field day for those with cash. This is symbolized in the saying attributed to Andrew Mellon that "in a depression assets return to their rightful owners," which Melinda Cooper cites here.
Here is Brad Delong on Hoover on Mellon:
Herbert Hoover's Treasury secretary, Andrew Mellon. In his memoirs Hoover was bitter toward many, but bitterest of all toward Mellon, whom he called the head of the "leave it alone liquidationists." Hoover quotes Mellon: "It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."
But I also think there is a political affect angle here: we shouldn't discount the existence of a positive desire on the part of the ruling classes to punish the working classes, to make them suffer. You don't have to be a full-blooded Nietzschean to hear that desire in all the "painful cuts" rhetoric. Nor to hear a debased Kantianism in Mellon's claim: "if it hurts, it must be moral."
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