President Obama has written about the need for balance between the free market and government regulations in the Wall Street Journal today. In the process, however, he repeats a canard about how insufficient regulation “caused” the financial crisis of 2008:

The crisis was the result of a complex “perfect storm” of factors. While transparency in financial markets (particularly the mortgage market) was severely lacking, the idea that a dearth of government interference in the marketplace led to the crisis is dubious. As economist Raghuram Rajan has argued, it was the government’s role in encouraging the irresponsible extension of credit–a bipartisan effort–that is more to blame. Christopher Caldwell wrote about this last year: