Financial Crisis

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The proliferation of abusive financial practices certainly played a notorious role in the financial crisis. Calls to reform the sector have included proposals to create a new and independent Consumer Financial Protection Agency (CFPA). Advocates have argued the next regulatory regime must be designed with the consumer-and not just financial institutions-in mind.

Paul Krugman also likes Elizabeth Warren, and apparently, Canadians as well.

Yes, they are boring, he says, but in some cases that's a good thing. Such as with banking! Unfortunately, the banking headlines in the U.S. have recently been about meltdowns and credit freezes.

Not many heroes have emerged from the morass of the financial meltdown. But the voice of Elizabeth Warren has repeatedly stood out. Not only did she answer the call when Senator Reid tapped her to oversee the implementation of the TARP stabilization program, but she has repeatedly offered a clear and sober account of how the economy was taken to the edge of the economic abyss by increasingly risky financial practices. 

"Is the president finally getting serious about real financial reform? Last Thursday, Obama called for the biggest regulatory crackdown on banks since the 1930s, proposing strict limits on the size of financial institutions and a ban on risky activities such as proprietary trading and internal hedge funds." So writes Marshall Auerback in a new policy paper. Although the proposed regulations are a good start, Auerback argues, "a more broadly based approach, which incorporates all financial services intermediaries, might ultimately be required."

My colleague Joe Mathews participated in a live Politico webchat last week on the worrisome state of California. While the discussion ranged from pensions to prisons to a constitutional convention, these questions were particularlly interesting:

My colleague Barry Lynn just released his excellent new book, entitled Cornered: The New Monopoly Capitalism and the Economics of Destruction. It is an especially timely release because it elevates a set of issues that deserve to take center stage in current debates about the economy and the collective future of our political economy. As a follow up to his 2005 book End of the Line which described the increasingly risky supply chain of the new global corporation, Barry now takes his readers on a contemporary tour of our economy to reveal the widespread consolidation of corporate control in almost every conceivable sector. Eyeglasses, shampoo, pharmaceuticals, banks, toothpaste, candy, music distribution, electronics, book sales, commodities, seeds, and even whisky and beer are all dominated by a few large providers that are able to exert a degree of authoritarian control that is debilitating to many would-be small providers and workers alike.

California is facing massive budget shortfalls, and Gov. Arnold Schwarzenegger (R) has accused Washington of not providing its fair share of funding.

On January 20, 2010, New America welcomed distinguished economist Joseph Stiglitz in presenting his new book, Freefall: America, Free Markets, and the Sinking of the World Economy. Dr. Stiglitz began his talk by stating that the economy prior to the collapse had been sick for quite some time; indeed, according to Dr. Stiglitz, the economic collapse had been highly predictable. The cause of the financial crisis had been the false assumption that markets are self-regulating. However, Dr.

On January 12, Bernard L. Swartz Fellows Peter Beinart and Megan McArdle discussed the legacy of the past decade, with particular focus on U.S. foreign policy and the economy. The event was moderated by Andrés Martinez, Director of the Fellows Program. The speakers were introduced by Steve Coll, President of New America.