Melloan doesn’t state it, but there is a name for this economic policy: corporatism. Big government favors selected big business and rewards big labor as a junior partner. It’s not socialism, but the economic component of a fascist political program. Credit administered on a favorable terms is the narcotic that anesthetizes businessmen to the creeping government control of their firms. To paraphrase Lenin, government seizes control of the commanding heights of the economy.
After the loss of economic liberty, can political liberty survive? As Melloan concludes, “it’s not unlike what we witnessed in the depression of the 1930s.”
Serious stuff with far-ranging consequences.