Financial Fiasco: How America's Infatuation with Home Ownership and Easy Money Created the Economic Crisis

Financial Fiasco: How America's Infatuation with Home Ownership and Easy Money Created the Economic Crisis

by Johan Norberg
     
 

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Financial Fiasco digs deep into the foundation of the economic meltdown, revealing how it was the product of conscious actions by decision makers in companies, government agencies, political institutions, and consumers. An easily accessible work written for general readers, Financial Fiasco tells the compelling story of how rate cutting by the Federal Reserve

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Overview

Financial Fiasco digs deep into the foundation of the economic meltdown, revealing how it was the product of conscious actions by decision makers in companies, government agencies, political institutions, and consumers. An easily accessible work written for general readers, Financial Fiasco tells the compelling story of how rate cutting by the Federal Reserve inflated the real estate market and fueled increased risk-taking in the financial markets; how new government policies to promote home ownership blasted air into the credit bubble; how new financial instruments, credit-rating requirements, and accounting rules intended to prevent cheating backfired; and much more. Financial Fiasco guides readers through a world of irresponsible behavior, warns that many of the solutions being implemented are repeating the mistakes that caused the crisis, and offers guidance on how to move forward.

Editorial Reviews

Amity Shlaes
Johan Norberg exposes the abiding hypocrisies of policy that generated this crisis far better than an American insider could. A masterwork in miniature.
Walter E. Williams
The subtitle of Johan Norberg's book, Financial Fiasco, is 'How America's Infatuation with Homeownership and Easy Money Created the Economic Crisis,' which captures the root causes of today's financial crisis. This highly readable book, by a historian, gives an unbiased explanation of the various factors leading to the financial meltdown, and says that if we're looking for scapegoats, we need only to take a look in the mirror. Norberg has done a yeoman's job in economic diagnostics. Whether the American people want to take the necessary treatment is another question.
Professor Jeff Miron Harvard University
Financial Fiasco, by Johan Norberg, is a penetrating and frightening analysis of the causes and consequences of the 2008 Financial Panic. Norberg lays out with precision and detail how a perfect storm of misguided government policies and private sector exuberance combined to create the worst economic downturn since World War II. This is essential reading for everyone who cares about our economic future, but especially for those who are still not sure what caused the crisis. As Norberg makes clear, private forces jumped willingly on a runaway train, but it was government that built the train and drove it off a cliff.
Jeffrey Miron
Essential reading for everyone who cares about our economic future, but especially for those who are still not sure what caused the crisis. As Norberg makes clear,private forces jumped willingly on a runaway train, but it was government that built the train and drove it off a cliff.
Library Journal
Norberg (In Defense of Global Capitalism) searches high and low for the culprits who, in his opinion, caused what he calls the "perfect financial storm." He implicates many individuals and institutions, including Wall Street tycoons, credit rating analysts, banking executives, government officials, and, ultimately, the American home-buying public itself. But Norberg allots particular responsibility to the Federal Reserve (both Greenspan and Bernanke) for reckless interest-rate cutting that arguably played a role in creating the real estate bubble and subsequent financial calamities. Norberg has done impressive research, assembling evidence that the crisis was not merely systemic, but he doesn't propose a fitting punishment for the accused. For example, does he want Fannie and Freddie eliminated, scaled back in size, or simply left alone? VERDICT Norberg is a libertarian who sees government intervention of any kind as a "bad thing," but his theses do not convincingly support his conclusions. Consumers wanting a basic introduction to the background of the financial crisis from a purely libertarian perspective might benefit from this book. However, it still has a "first draft" feel, as if published in haste. Readers wanting a more in-depth and balanced analysis would profit from Mark Zandi's newly updated Financial Shock.—Richard Drezen, Brooklyn, NY

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Product Details

ISBN-13:
9781935308133
Publisher:
Cato Institute
Publication date:
10/25/2009
Pages:
208
Product dimensions:
6.20(w) x 9.10(h) x 0.90(d)

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