Category Archives: Financial Crisis of 2008

Ben Bernanke takes on Sebastian Mallaby

Bernanke writes, Mallaby’s argument that Greenspan should have known that a tighter monetary policy was appropriate in 2004-2005 (if that was in fact the case!) strains credulity. In 2003 the Fed was navigating a deflation scare and a jobless recovery … Continue reading

Posted in books and book reviews, Financial Crisis of 2008, Tyler Cowen is my Favorite Blogger | 2 Comments

Another Idiosyncratic Comment

Kevin Erdmannn comments, It seems like you’re making the very mistake Smith is warning about. I don’t think historians looking at the newspapers of 2005 would be struck with the high level of trust we had in financial intermediaries. We … Continue reading

Posted in Financial Crisis of 2008 | 3 Comments

Common-law Banks

A commenter asks, What do you think of the limited purpose banking proposal advanced by Laurence Kotlikoff and others? Link to PDF: https://www.aeaweb.org/conference/2012/retrieve.php?pdfid=568 I am skeptical of the ability of government to design banks. It is one thing to write … Continue reading

Posted in Financial Crisis of 2008 | 6 Comments

What Was Glass-Steagall?

I don’t think that Robert Reich actually knows. Some argue Glass-Steagall wouldn’t have prevented the 2008 crisis because the real culprits were non-banks like Lehman Brothers and Bear Stearns. But that’s baloney. These non-banks got their funding from the big … Continue reading

Posted in Financial Crisis of 2008, Tyler Cowen is my Favorite Blogger | 7 Comments

Larry Ball Gets Pushback

From Stephen G. Cecchetti and Kermit L. Schoenholtz: There is certainly room for debate, but we see the question of whether Lehman’s net worth was negligible or sharply negative as ancillary to the real issue. In important ways, lending to … Continue reading

Posted in Financial Crisis of 2008 | 7 Comments

Paulson, Bernanke, and Lehman, continued

James B. Stewart writes, One of the more intriguing questions Professor Ball tackles is why Mr. Paulson, rather than Mr. Bernanke, appears to have been the primary decision maker, when sole authority to lend to an institution in distress rests … Continue reading

Posted in Financial Crisis of 2008, Mark Thoma is Indispensable | 11 Comments

The Fed and Lehman

Laurence Ball writes, The people in charge in 2008, from Ben Bernanke on down, have said repeatedly that they wanted to save Lehman, but could not do so because they lacked the legal authority. . . I conclude that the … Continue reading

Posted in Financial Crisis of 2008 | 25 Comments

Thomas Sowell on Liberal Fascism

He writes, government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private … Continue reading

Posted in Financial Crisis of 2008, Libertarian Thought | 4 Comments

Jason Collins on John Kay

Jason makes it sound like Kay’s book is worth reading. One of the most interesting threads in the books is that many of the regulatory mantras are about the financial intermediaries, not the end users. The drives for transparency and … Continue reading

Posted in books and book reviews, Financial Crisis of 2008, Jason Collins is Indispensable | 1 Comment

Ed Kane on Financial Regulation

The headline on the interview is confusing, but his remarks are not. She [Hillary Clinton] goes part way toward Senator Sanders in proposing to give regulators more power to break up financial firms. But federal regulators have a lot of … Continue reading

Posted in Financial Crisis of 2008, Mark Thoma is Indispensable | 4 Comments