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2. Fannie, Freddie, and the Subprime Mortgage Market
- Author:
- Mark A. Calabria
- Publication Date:
- 03-2011
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- The recent financial crisis was characterized by losses in nearly every type of investment vehicle. Yet no product has attracted as much attention as the subprime mortgage.
- Topic:
- Economics, Government, Markets, and Financial Crisis
- Political Geography:
- United States
3. Herbert Hoover: Father of the New Deal
- Author:
- Steven Horwitz
- Publication Date:
- 09-2011
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Politicians and pundits portray Herbert Hoover as a defender of laissez faire governance whose dogmatic commitment to small government led him to stand by and do nothing while the economy collapsed in the wake of the stock market crash in 1929. In fact, Hoover had long been a critic of laissez faire. As president, he doubled federal spending in real terms in four years. He also used government to prop up wages, restricted immigration, signed the Smoot-Hawley tariff, raised taxes, and created the Reconstruction Finance Corporation-all interventionist measures and not laissez faire. Unlike many Democrats today, President Franklin D. Roosevelt's advisers knew that Hoover had started the New Deal. One of them wrote, "When we all burst into Washington ... we found every essential idea [of the New Deal] enacted in the 100-day Congress in the Hoover administration itself."
- Topic:
- Economics, Markets, Political Economy, Financial Crisis, and Governance
- Political Geography:
- United States and Washington
4. Short Sales Bans: Shooting the Messenger?
- Author:
- Laurence Copeland
- Publication Date:
- 09-2010
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- In response to the recent financial crisis, many governments chose to ban or restrict short sales, hoping to mitigate the impact of the stock market downturn. Stock markets function as a continuous election, held to determine the allocation of resources with buyers voting for and sellers voting against investment in particular stocks. Banning short selling is akin to disenfranchising the "no" voter, thereby creating a distortion in the resource allocation process. Ban-induced price distortions damage the integrity of stock prices among investors and potentially cause stocks to expand beyond what is optimal for the firms and the economy.
- Topic:
- Economics, Markets, Global Recession, and Financial Crisis
- Political Geography:
- Washington
5. The Case for Auditing the Fed Is Obvious
- Author:
- Arnold Kling
- Publication Date:
- 04-2010
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Recently, the Federal Reserve has significantly altered the procedures and goals that it had followed for decades. It has more than doubled its balance sheet, paid interest to banks on reserves held as deposits with the Fed, made decisions about which institutions to prop up and which should be allowed to fail, invested in assets that expose taxpayers to large losses, and raised questions about how it will avoid inflation despite an unprecedented increase in the monetary base.
- Topic:
- Economics, Government, Political Economy, Politics, and Financial Crisis
- Political Geography:
- United States
6. Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer
- Author:
- Arnold Kling
- Publication Date:
- 09-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- The Fannie Mae-Freddie Mac crisis may have been the most avoidable financial crisis in history. Economists have long complained that the risks posed by the government-sponsored enterprises were large relative to any social benefits.
- Topic:
- Economics, Government, and Financial Crisis
- Political Geography:
- United States