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Begin New Search Topic Financial Crisis Publishing Institution The Cato Institute Publication Year within 25 Years

21. Three Narratives about the Financial Crisis

Author:
Peter J. Wallison
Publication Date:
09-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The most important lesson we can learn from the financial crisis is what caused it. Even though the Dodd-Frank Act (DFA) has been signed into law, this is still an important question. If we do not attribute the crisis to the right cause, we could well stumble into another crisis in the future; and if the DFA was directed at the wrong cause, we should consider its repeal. There are several competing narratives. One of them will eventually be accepted, and will determine how the great financial crisis of 2008 is interpreted, and thus how it affects public policy in the future.
Topic:
Financial Crisis

22. Friedman and Samuelson on the Business Cycle

Author:
J. Daniel Hammond
Publication Date:
09-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Chicago School economists have come in for criticism since the financial crisis and so-called Great Recession began in 2007. Commentators have blamed recent problems on a laissez-faire faith in the efficacy of markets and simple rules for business-cycle policy—ideas associated with economics as taught and practiced at the University of Chicago. Events over the past four years, we are told, demonstrate the need for a restoration of Keynesian thinking about business cycles and activist government policies to keep markets from failing. However, there is another aspect of Chicago School economics that is commonly overlooked. This is the conviction that economists' understanding of the business cycle is meager in light of the knowledge necessary for activist countercyclical policy to be effective. From this comes the Chicago School concern that economists and policymakers not attempt to do something beyond their capability. Overreaching can make the problems worse.
Topic:
Economics and Financial Crisis
Political Geography:
Chicago

23. 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

24. The New "Supercommittee": An "Optimistic" View

Author:
Jared Lobdell
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
An October New York Times story remarked that “with just five weeks until its deadline, a secretive Congressional committee seeking ways to cut the federal deficit is far from a consensus, and party leaders may need to step in if they want to ensure agreement, say people involved in the panel's work.” We have this “supercommittee” of twelve members of Congress, ostensibly for the purpose of cutting a minimum $1.2 trillion from our deficit, chosen by four appointers, none agreeing with any other on exactly what ought to be done, representing mostly diametrically opposing wings of two parties with irreconcilable differences.
Topic:
Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
United States

25. Alchemists of Loss: How Modern Finance and Government Intervention Crashed the Financial System by Kevin Dowd and Martin Hutchinson

Author:
Steven Horwitz
Publication Date:
06-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The combination of the recession and financial crisis of the last few years has led to quite the outpouring of books by economists purporting to explain what happened and why, and how to avoid a repeat performance. This very crowded field has seen a range of quality, but a good number of these books have been quite well done. Alchemists of Loss by Great Britain's Kevin Dowd and Martin Hutchinson is another very good treatment of the issues. The authors bring a wealth of experience to their book. Dowd has had a long career as an academic, with much of his work focusing on the history and theory of “free banking” and other forms of financial deregulation. Hutchinson is a longtime financial journalist and has worked in the merchant and investment banking industries in Britain. They have written a comprehensive, fairly detailed, and surprisingly entertaining account of the historical context, theoretical framework, and actual events of the crisis.
Topic:
Financial Crisis
Political Geography:
Britain

26. 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

27. Lawless Policy: TARP as Congressional Failure

Author:
John Samples
Publication Date:
02-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The U.S. Constitution vests all the “legislative powers” it grants in Congress. The Supreme Court allows Congress to delegate some authority to executive officials provided an “intelligible principle” guides such transfers. Congress quickly wrote and enacted the Emergency Economic Stabilization Act of 2008 in response to a financial crisis. The law authorized the secretary of the Treasury to spend up to $700 billion purchasing troubled mortgage assets or any financial instrument in order to attain 13 different goals. Most of these goals lacked any concrete meaning, and Congress did not establish any priorities among them. As a result, Congress lost control of the implementation of the law and unconstitutionally delegated its powers to the Treasury secretary. Congress also failed in the case of EESA to meet its constitutional obligations to deliberate, to check the other branches of government, or to be accountable to the American people. The implementation of EESA showed Congress to be largely irrelevant to policymaking by the Treasury secretary. These failures of Congress indicate that the current Supreme Court doctrine validating delegation of legislative powers should be revised to protect the rule of law and separation of powers.
Topic:
Economics, Monetary Policy, and Financial Crisis
Political Geography:
United States and America

28. In Fed We Trust: Ben Bernanke's War on the Great Panic

Author:
William Poole
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
David Wessel is a fine journalist; In Fed We Trust is a fine book. It belongs on the shelf of every student of the 2007–09 financial crisis. It is, as well, a good read for recreational observers of the economic scene. Wessel focuses on Fed Chairman Ben S. Bernanke, but he discusses the role of all the other key players as well. The biographical information on Bernanke is interesting, as are Wessel's comments on the policy approaches and personalities of the other policymakers.
Topic:
War and Financial Crisis

29. Unchecked and Unbalanced: How the Discrepancy between Knowledge and Power Caused the Financial Crisis and Threatens Democracy

Author:
Mark Calabria
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Arnold Kling's Unchecked and Unbalanced is a novel and insightful take on both the financial crisis and broader trends in the provision of government services. Its central point is best summarized by its subtitle, “How the discrepancy between knowledge and power caused the financial crisis and threatens democracy.” This is a brief, very readable book for two distinct audiences, those interested in further understanding the financial crisis and those interested in improving the accountability and efficiency of services provided by government.
Topic:
Financial Crisis

30. 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