Financial Fiasco: How America's Infatuation with Home Ownership and Easy Money Created the Economic Crisis, With a New Afterword by the Author

by Johan Norberg

Overview

Now newly expanded, Financial Fiasco digs deep into the foundation of the economic meltdown, revealing how it was the product of conscious actions by consumers, as well as decisionmakers in companies, government agencies, and political institutions. An easily accessible work written for general readers, Financial Fiasco tells the compelling story of how ate-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 repeat the mistakes that caused the crisis, and offers guidance on how to move forward.

Product Details

ISBN-13:	9781937184414
Publisher:	Cato Institute
Publication date:	09/16/2012
Edition description:	Newly Expanded
Pages:	208
Product dimensions:	6.00(w) x 8.90(h) x 0.70(d)

About the Author

Johan Norberg is a senior fellow at the Cato Institute and the author of In Defense of Global Capitalism.

Table of Contents

Preface to the Paperback Edition xi

Preface to the First Edition xiii

1 Preemptive Keynesianism 1

2 Castles in the Air 23

3 How to Build Financial Weapons of Mass Destruction 45

4 Hurricane Season 69

5 Madly in All Directions 99

6 Tomorrow Capitalism? 129

7 Oops, We Did it Again 157

My Debts 173

Notes 175

References 185

Index 197

Editorial Reviews

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

Library Journal