financial crises and the failure of American democracy McCarty, Nolan M. (Nolan Matthew) 1967- creator Poole, Keith T. Rosenthal, Howard L. 1939- text bibliography nju Princeton Princeton University Press 2013 monographic eng spa

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x, 356 p. : ill. ; 24 cm 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 Bubbles offers timely lessons that all sectors would do well to heed. p.1. The political bubble : why Washington allows financial crises to occur -- Bubble expectations -- Ideology -- Interests -- Institutions -- The political bubble of the crisis of 2008 -- p.2. Pops : why Washington delays in solving financial crises -- Historical lessons of the responses to pops -- The pop of 2008 -- "Pop"ulism -- How to waste a crisis. Nolan McCarty, Keith T. Poole, Howard Rosenthal. Includes bibliographical references (p. [305]-326) and indexes. n-us--- Global Financial Crisis, 2008-2009 Political aspects Crisis financiera global, 2008-2009 Aspectos políticos Financial crises United States History 21st century Crisis financiera Estados Unidos Historia Siglo XXI HB 3717 M478p 2013 330.973/0931 9780691145013 (cloth : alk. paper) 0691145016 (cloth : alk. paper) DLC 121109 20230404125847.0 eng