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371. Government Housing Policy and the Financial Crisis

Author:
Peter J. Wallison
Publication Date:
06-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is popular around the world to blame the financial crisis on the United States. But before we identify this as the usual anti- Americanism, we should perhaps look more seriously at our country's housing policies. Unfortunately, there is a strong argument that the financial crisis is indeed the fault of the United States—an artifact of the housing policies that this country has followed since the early 1990s. These policies produced an unprecedented number of subprime and other nonprime mortgages (known as Alt-A), and when the housing bubble topped out in late 2006 and early 2007, these loans began to default at unprecedented rates. In my view, the severe losses associated with these defaults caused weakness of Bear Stearns and AIG—resulting in their rescue—the failure of Lehman Brothers, the severe recession we are experiencing in the United States today, and ultimately the financial crisis itself.
Topic:
Financial Crisis
Political Geography:
United States

372. Economic Contractions in the United States: A Failure of Government

Author:
Mark Calabria
Publication Date:
06-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Charles Rowley and Nathanael Smith have put together a brief, yet extensive, study comparing America's Great Depression and the recent financial crisis. Their focus is on both the economics and the politics behind these events. With both, they demonstrate how each was a failure of government, not of the market. The book concludes with several recommendations for addressing our nation's current economic and fiscal situation. The most original contribution of their work is in bringing a Public Choice framework to evaluating the financial crisis.
Topic:
Economics and Financial Crisis
Political Geography:
United States

373. Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives, and Bankrupting the Nation

Author:
Chris Edwards
Publication Date:
06-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
New data from the Bureau of Labor Statistics show that there are more union members in the public sector than in the private sector in the United States. Thirty-nine percent of state and local government workers are members of unions, compared to just 7 percent of private sector workers. What problems are caused by the high level of public sector unionism?
Topic:
Monetary Policy
Political Geography:
United States

374. Mind vs. Money: The War between Intellectuals and Capitalism

Author:
Jason Kuznicki
Publication Date:
06-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Alan Kahan's Mind vs. Money is an absurdly ambitious little book. I had all sorts of disagreements with it, both factually and methodologically. Still, it does important work, and does so well enough that I would not hesitate to teach from it as a textbook in the intellectual history of commerce.

375. Reforming Medical Malpractice Liability through Contract

Author:
Michael F. Cannon
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
This paper discusses the medical malpractice "crisis" and the potential of contract liability to reduce overall malpractice costs as well as improve the quality of and access to care. First, the paper describes the current medical malpractice liability "system" and some of the more common reforms offered. It then discusses the economic rationale of allowing patients and providers to agree in advance of treatment on how the patient will be compensated in the event of simple negligence on the part of providers, explaining how contract liability may offer improvements in the areas of costs, patient preferences, the pursuit of more efficient liability rules, and quality of care. The paper then critiques select objections to contract liability – those based on the superior bargaining power of providers, the lack of information available to patients, and possible reductions in quality – and forwards possible limitations on the right to contract that may allay such concerns.
Topic:
Health, Law, and Health Care Policy
Political Geography:
United States

376. Has the Fed Been a Failure?

Author:
George A. Selgin, Lawrence H. White, and William D. Lastrapes
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
Topic:
Civil Society, Government, and Markets
Political Geography:
United States

377. Do Vouchers and Tax Credits Increase Private School Regulation?

Author:
Andrew J. Coulson
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
School voucher and education tax credit programs have proliferated in the United States over the past two decades. Advocates have argued that they will enable families to become active consumers in a free and competitive education marketplace, but some fear that these programs may in fact bring with them a heavy regulatory burden that could stifle market forces. Until now, there has been no systematic, empirical investigation of that concern. The present paper aims to shed light on the issue by quantifying the regulations imposed on private schools both within and outside school choice programs, and then analyzing them with descriptive statistics and regression analyses. The results are tested for robustness to alternative ways of quantifying private school regulation, and to alternative regression models, and the question of causality is addressed. The study concludes that vouchers, but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.
Topic:
Education, Government, and Markets
Political Geography:
United States

378. A Better Way to Generate and Use Comparative-Effectiveness Research

Author:
Michael F. Cannon
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
President Barack Obama, former U.S. Senate majority leader Tom Daschle, and others propose a new government agency that would evaluate the relative effectiveness of medical treatments. The need for “comparative-effectiveness research” is great. Evidence suggests Americans spend $700 billion annually on medical care that provides no value. Yet patients, providers, and purchasers typically lack the necessary information to distinguish between high- and low-value services.
Topic:
Economics, Government, Health, and Privatization
Political Geography:
United States

379. Health-Status Insurance: How Markets Can Provide Health Security

Author:
John H. Cochrane
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
None of us has health insurance, really. If you develop a long-term condition such as heart disease or cancer, and if you then lose your job or are divorced, you can lose your health insurance. You now have a preexisting condition, and insurance will be enormously expensive—if it's available at all. Free markets can solve this problem, and provide life-long, portable health security, while enhancing consumer choice and competition. “Heath-status insurance” is the key. If you are diagnosed with a long-term, expensive condition, a health-status insurance policy will give you the resources to pay higher medical insurance premiums. Health-status insurance covers the risk of premium reclassification, just as medical insurance covers the risk of medical expenses. With health-status insurance, you can always obtain medical insurance, no matter how sick you get, with no change in out-of-pocket costs.
Topic:
Economics, Health, Markets, and Privatization
Political Geography:
United States

380. Financial Crisis and Public Policy

Author:
Jagadeesh Gokhale
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
This Policy Analysis explains the antecedents of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve's actions to prop up the financial sector. It argues that recovery from the financial crisis is likely to be slow with or without the government's bailout actions. An oil price spike and a wealth shock in housing initiated the financial crisis. Declines in stock values are intensifying that shock, threatening to deepen the current recession as U.S. consumers and investors cut their expenditures. An offsetting wealth injection from additional risk-bearing investors could initiate a quicker recovery. Thus, supporters of government intervention justify the bailout's debt-financed fund injections—in essence, they want to compel future taxpayers to join the group of today's risk bearing investors.
Topic:
Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
United States