(DOWNLOAD) "Money and the Present Crisis (Report)" by The Cato Journal * Book PDF Kindle ePub Free
eBook details
- Title: Money and the Present Crisis (Report)
- Author : The Cato Journal
- Release Date : January 01, 2009
- Genre: Politics & Current Events,Books,
- Pages : * pages
- Size : 254 KB
Description
We remain in an economic crisis and financial crisis, one that Gary Gorton has named "The Panic of 2007" (Gorton 2008). The thesis of this article is that monetary policy has played a pivotal role. Under Alan Greenspan and now Ben Bernanke, the Fed has conducted monetary policy so as to foster moral hazard among investors, notably in housing (O'Driscoll 2008a). More generally, the crisis is the product of a "perfect storm" of misguided policy. Policies to encourage affordable housing fostered the growth of subprime lending and complex financial products to finance that lending. Regardless of the desirability of the social goal, the financial superstructure depended on housing prices never falling. Housing prices do fall sometimes, and did so decisively beginning in 2007 (Gorton 2008: 50). It is largely a myth that unregulated financial capitalism failed and new regulation is needed. Aside from health care, financial services is the most heavily regulated industry in the economy. No part of it completely escaped regulation and most parts were heavily regulated, typically with multiple government agencies overseeing the activities of financial services firms.
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