A history of the financial crisis from economist Alan Blinder
February 4, 2013
In his new book, After the Music Stopped, economist ALAN BLINDER offers a history of the financial crisis — its causes and the government efforts to fight it — and provides his prescription for the work that needs to be done to prevent it from happening again. He says the economy experienced a perfect storm beginning in 2007 when the housing bubble burst, the bond market imploded and the U.S. financial system had grown too complex and unregulated for the public good. Blinder has long been an advocate of government intervention and he believes that emergency initiatives like TARP (Troubled Assets Relief Program) and the stimulus bill, though far from perfect, helped prevent a total meltdown.Â Among is recommendations for the future is a ban on the self-regulation of banks and a fix of compensation systems that reward risky behavior. Blinder is a professor of economics at Princeton University ad served on President Clinton's Council of Economic Advisors and as vice chairman of the Federal Reserve Board of Governors.
AP Photo/Manuel Balce Ceneta