[...] Through bailouts of one kind or another, ranging from bank rescues to central bank bond-buying programs, crisis managers have not only stabilized the system; they have exposed its unending dependence on state intervention. In doing so, they have fatally undermined the ideological premises of post–Cold War capitalism.

Almost twenty years ago, New York Times columnist Thomas Friedman, the bard of neoliberalism, waxed lyrically about what he called “the Golden Straitjacket” — the “defining political-economic garment of this globalization era,” whose “original seamstress,” Margaret Thatcher, would “go down in history as one of the great revolutionaries of the second half of the twentieth century.” For a country to fit into the Golden Straitjacket required following the “golden rules”:

making the private sector the primary engine of its economic growth, maintaining a low rate of inflation and price stability, shrinking the size of its state bureaucracy, maintaining as close to a balanced budget as possible, if not a surplus, eliminating and lowering tariffs on imported goods, removing restrictions on foreign investment, getting rid of quotas and domestic monopolies, increasing exports, privatizing state-owned industries and utilities, deregulating capital markets, making its currency convertible, opening its industries, stock and bond markets to direct foreign ownership and investment, deregulating its economy to promote as much domestic competition as possible, eliminating government corruption, subsidies and kickbacks as much as possible, opening its banking and telecommunications systems to private ownership and competition and allowing its citizens to choose from an array of competing pension options and foreign-run pension and mutual funds.

China, whose outsized growth the global recovery vitally depends on, has flouted almost every item in Friedman’s catechism