Event Detail

Getting ready for America's next Bailouts

Amerika Haus e.V. NRW cordially invites you to a Lecture and Discussion »Getting Ready for America's Next Bailouts« with Prof. Richard Squire, Alpin J. Cameron Chair of Law, Fordham University, School of Law, NY

During the 2007-08 crisis, creative American officials devised more than a dozen programs to prevent financial firms from failing for lack of liquidity. These rescue measures were an economic success but a political failure. The government got its money back with interest, avoiding both moral hazard and inflation. Yet anti-bailout backlash led Congress to enact the 2010 Dodd-Frank Act, which hamstrings officials’ ability to respond with similar nimbleness in the next crisis. Today’s Congress wants to tie the hands of the Federal Reserve and FDIC even tighter. Yet another banking crisis is bound to occur so long as the American government continues subsidizing home mortgages, which it seems determined to do. And house prices are again heading for the sky. Politicians must learn that when the Federal Reserve and FDIC act as lenders of last resort, lending freely at penalty rates against good collateral to solvent firms, they are not “fleecing Main Street to save Wall Street.” Nor are they undermining free markets, arbitrarily picking economic winners and losers. They are supplying a valuable service that only the government, with control of the fiat currency, can offer. If they cannot serve this role in the next crisis, Congress will have to react on an emergency basis, like it did by creating the TARP scheme in 2008. And politicized, ad hoc bailouts are always damaging, both economically and politically. 

Entrance is free. Please note that space is limited! Registrations will be handled on a “first come, first served” basis. Members of Freundeskreis Amerika Haus e.V. NRW enjoy priority with the registration. You may sign up for membership here: http://amerikahaus-nrw.de/de/freundeskreis.html

 

Mandatory Registration: https://www.eventbrite.de/e/getting-ready-for-americas-next-bailouts-tickets-39513435750

 

Ort: CMS Hasche Sigle, Im Zollhafen 18, 50678 Köln

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