Financial Crisis

It has been a fairly consequential week in the ongoing debate around the future of financial reform. Sen. Dodd has been tasked to get a deal done that can pass the Senate and is actively engaged with Sen. Corker (R-TN).

Elizabeth Warren, Chair of the TARP Congressional Oversight Panel and Harvard Law Professor, was the featured speaker at this event. Professor Warren outlined what she sees as the necessary components of an effective consumer financial protection regulation reform and then discussed these and related issues with journalist David Corn of Mother Jones.

I’m very honored to be here today to talk about the situation we find ourselves in more than 2 years into a very deep and seemingly never-ending recession, through two lenses—policy in Washington, and community banking and community development finance. And I’ll try, without being presumptuous, to bring it home to Maine.

On March 4, New America’s Phil Longman and Barry C. Lynn explored why job growth has stalled in the United States over the last decade. The event was based on the cover story in the current issue of the Washington Monthly, in which Longman and Lynn point to corporate consolidation as the major factor in job growth stagnation, brought on by decades of weak antitrust enforcement in Washington.

If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.

As we celebrate or bemoan the first anniversary of the federal stimulus bill, we've seen a kabuki conflict over whether it was a good idea or a bad idea, and whether the economy needs another booster shot. I tend to think that the stimulus was poorly designed and dangerously expensive, but we can't lose sight of the fact that the really important debate is, as the libertarian thinker Tim Lee often argues, between the partisans of top-down and bottom-up.

The House of Representatives has passed a sweeping financial reform bill that includes the establishment of a new, independent, and empowered Consumer Financial Protection Agency. The debate is currently unfolding in the Senate, where Chris Dodd has pledged to push a comprehensive reform package over the finish line before he retires at the end of the year. As policy deliberations unfold, the specifics of this proposal deserve scrutiny—especially with an eye toward the policy features which would be most effective in protecting consumers and creating a safer and sustainable marketplace for financial services.

I’ve just released a paper which is designed to contribute to this process by presenting the case for creating a new agency, describing key features of the House bill, and reviewing some of the primary issues as stake.

One of the reasons progressives are losing the debate about fiscal policy arises from the fact that the debate is taking place at two levels: that of the academic seminar and that of the kitchen table. At the seminar level, the case for spending now, as long as the crisis lasts, and paying down the deficit later, when the economy is sustainably growing again, is based on macroeconomic theory. At the level of the kitchen table, however, the debate is framed in terms of what passes for folksy common sense.

The financial crisis in Greece and other southern European nations is testing the stability of the "eurozone." Was Europe's social capitalism not quite as stable as supporters have claimed? Or is this another case of Wall Street overreach wreaking havoc in the global economy?

A long time ago, in a land far, far away (Friday, February 5th to be exact, the morning before DC started to look like Hoth), the Asset Building Program held an event featuring Alyssa Katz, the author of "Our Lot: How Real Estate Came to Own Us."