> If this hypothesis is true then you would think that the government in place would do everything they can to stop the far right/far left from rising from the ashes of the failed social safety net.

I don't think they can. When the mainstream messes up really badly, people turn to the fringe. The mainstream can try to hinder them, but can't really stop them by anything other than not messing up badly. Once something like 2008 has happened, it's already too late.