eBook

Political bubbles

McCarty, Nolan, Rosenthal, Howard, Poole, Keith T

2013

Overview

Behind every financial crisis lurks a \"political bubble\"--policy biases that foster market behaviors leading to financial instability. Rather than tilting against risky behavior, political bubbles--arising from a potent combination of beliefs, institutions, and interests--aid, abet, and amplify risk. Demonstrating how political bubbles helped create the real estate-generated financial bubble and the 2008 financial crisis, this book argues that similar government oversights in the aftermath of the crisis undermined Washington's response to the \"popped\" financial bubble, and shows how such patterns have occurred repeatedly throughout US history. The authors show that just as financial bubbles are an unfortunate mix of mistaken beliefs, market imperfections, and greed, political bubbles are the product of rigid ideologies, unresponsive and ineffective government institutions, and special interests. Financial market innovations--including adjustable-rate mortgages, mortgage-backed securities, and credit default swaps--become subject to legislated leniency and regulatory failure, increasing hazardous practices. The authors shed important light on the politics that blinds regulators to the economic weaknesses that create the conditions for economic bubbles and recommend simple, focused rules that should help avoid such crises in the future. The first full accounting of how politics produces financial ruptures,Political Bubblesoffers timely lessons that all sectors would do well to heed.

• Publisher: Princeton University Press,Princeton Univ. Press
• Subject: 21st century / Activism / American Recovery and Reinvestment Act of 2009 / Asset / Bankruptcy / Barack Obama / Bear Stearns / Ben Bernanke / BUSINESS & ECONOMICS / Economics / General / Chapter 9 / Citigroup / Cloture / Commercial bank / Commodity Futures Trading Commission / Credit default swap / Crony capitalism / Democracy- Jpa- 1kbb- Jphv- Kcp- Kc / Dodd–Frank Wall Street Reform and Consumer Protection Act / Economic interventionism / Economics / Economist / Employment / Enron / Fannie Mae / Finance / Financial crises / Financial crises -- United States -- History -- 21st century / Financial crisis / Financial crisis of 2007–08 / Financial innovation / Financial institution / Financial regulation / Financial services / Finanzkrise / Fiscal conservatism / Foreclosure / Fraud / Freddie Mac / General- Political Science / George W. Bush / Glass–Steagall Legislation / Global Financial Crisis, 2008-2009 / Global Financial Crisis, 2008-2009 -- Political aspects / Goldman Sachs / Great Recession / Henry Paulson / History / History & Theory / History & Theory- Business & Economics / Ideology / Income / Institutionenökonomik / Interessenpolitik / Interest rate / Investor / JPMorgan Chase / Legislation / Legislator / Lehman Brothers / Lobbying / Long-Term Capital Management / Merrill Lynch / MF Global / Mortgage loan / Occupy Wall Street / Patient Protection and Affordable Care Act / Paul Volcker / Policy / Political aspects / Political economy / Political Economy- Political Science / Political Ideologies / POLITICAL SCIENCE / POLITICAL SCIENCE / History & Theory / POLITICAL SCIENCE / Political ideologies / Democracy / POLITICAL SCIENCE / Political Ideologies / General / POLITICAL SCIENCE / Political Economy / Politician / Politics / Populism / Predatory lending / Private sector / Provision (accounting) / Real estate bubble / Recession / Staatliche Einflussnahme / Tax / The Public Interest / Too big to fail / Troubled Asset Relief Program / Unemployment / United States / USA / Voting / Wells Fargo / Öffentliche Meinung
• ISBN: 9780691165721, 0691165726, 9780691145013, 0691145016, 1400846390, 9781400846399