Today and tomorrow, as a part of the Antiplanner’s continuing series about the 2008 economic meltdown, I am going to look at many of the supposed causes of the crisis and show that, while some of them may have made the crisis worse, none of them were the ultimate cause of the crisis. In some cases, I’ll quote a 2009 paper written by two of my colleagues at Cato. In doing so, I have to confess that, while we agree about what didn’t cause the crisis, I haven’t been able to convince all of my Cato colleagues, including at least one of the authors of this paper, about what did cause it.
I’ll also quote from William Cohan’s House of Cards, a book that is mainly about Bear Stearns. In fact, only the first third of the book is about the 2008 crisis; the rest is on the history of that company in the 75 years before that crisis. Unlike some financial writers, Cohan actually worked on Wall Street for 17 years, including a decade as a managing director at JPMorgan Chase. Perhaps this is why Cohan can supply of lot of insights and details missing from some of the other books I’ve read on the crisis.
